In 2012, the Cameratta Company used a predetermined manufacturing overhead rate of $4.75 per machine hour. Information for the year is as follows: What was the preliminary ending balance in the manufacturing overhead account before the year-end adjustment to clear the balance to zero?

Question

In 2012, the Cameratta Company used a predetermined manufacturing overhead rate of $4.75 per machine hour. Information for the year is as follows:  What was the preliminary ending balance in the manufacturing overhead account before the year-end adjustment to clear the balance to zero?

Quizplus · Accepted Answer

The predetermined manufacturing overhead rate is $4.75 per machine hour.

Total machine hours = 21,200 + 3,800 = 25,000

Total manufacturing overhead applied = $4.75 x 25,000 = $118,750

Actual manufacturing overhead costs incurred = $119,010

Overhead applied < Actual overhead costs = Overapplied overhead

$119,010 - $118,750 = $260

The balance in the manufacturing overhead account before the year-end adjustment will be a debit balance of $260, so the answer is D.

In 2012, the Cameratta Company Used a Predetermined Manufacturing Overhead