On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below. During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
June 13: Pay $7,500 of direct factory labor cost, and $14,100 of indirect factory labor cost.
Following these transactions, what was the balance in the Manufacturing overhead account?

Question

On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below.  During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
June 13: Pay $7,500 of direct factory labor cost, and $14,100 of indirect factory labor cost.
Following these transactions, what was the balance in the Manufacturing overhead account?

Quizplus · Accepted Answer

The balance in the Manufacturing overhead account can be found by adding up the indirect materials and indirect labor costs, and then subtracting this total from the beginning balance plus the direct materials and direct labor costs.

Beginning balance: $30,000 
Direct materials: $2,400 
Direct labor: $7,500 
Indirect materials: $200 
Indirect labor: $14,100

Total manufacturing costs: 
$30,000 (beginning balance) + $2,400 (direct materials) + $7,500 (direct labor) + $200 (indirect materials) + $14,100 (indirect labor) = $54,200

Manufacturing overhead: 
$54,200 (total manufacturing costs) - $30,900 (indirect materials and indirect labor) = $23,300

Therefore, the balance in the Manufacturing overhead account is $23,300. However, none of the answer choices match this amount. The closest answer choice is B, $55,300, which is the total of the beginning balance ($30,000) plus the total manufacturing costs ($54,200), but it includes both direct and indirect materials and labor costs. It is possible that this is a mistake in the answer choices or that there is missing information in the question.

On June 1, 2012, Dalton Production Company Had Beginning Balances