Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,and actual labor hours were 21,000.To dispose of the balance in the Manufacturing Overhead account,which of the following would be correct?

Question

Quizplus · Accepted Answer

The overhead was over-applied by $5,000 (estimated $200,000 vs. actual $215,000), so the Manufacturing Overhead account should be credited to dispose of the over-applied balance.

Manufacturing Overhead Was Estimated to Be $200,000 for the Year