The manufacturing overhead control account and the manufacturing overhead allocated account both have zero balances at the end of each year after all adjustments are recorded.

Question

Quizplus · Accepted Answer

Since manufacturing overhead is allocated based on estimated overhead costs and adjusted at the end of the year, the manufacturing overhead allocated account and the manufacturing overhead control account should have equal and opposite balances. Therefore, when all adjustments are recorded, the balances should zero out.

The Manufacturing Overhead Control Account and the Manufacturing Overhead Allocated