Cal, Inc.showed the following amounts in its manufacturing overhead account at the end of 2020: $$\begin{array}{l}
\begin{array} { l | l }
\text { Manufacturing}& \text {Overhead }\
\hline 20,000 & \
16,000 & 55,000 \
22,000 &
\end{array}
\end{array}$$ Based on this information, which statement is true?

Question

Cal, Inc.showed the following amounts in its manufacturing overhead account at the end of 2020: $$\begin{array}{l}
\begin{array} { l | l } 
\text { Manufacturing}& \text {Overhead }\
\hline 20,000 & \
16,000 & 55,000 \
22,000 & 
\end{array}
\end{array}$$ Based on this information, which statement is true?

Quizplus · Accepted Answer

The manufacturing overhead account balance of $28,000 represents an over allocation of overhead. Since there was more overhead allocated or applied to production than actually incurred, the result is an over applied overhead. Therefore, the correct answer is D, Manufacturing overhead has been under applied.

Cal, Incshowed the Following Amounts in Its Manufacturing Overhead Account at at the End