SES Manufacturing has finished production activities for the year.The company allocates manufacturing overhead based on direct labor costs.The company has provided the following information: $$\begin{array} { | l | l | }
\hline \begin{array} { l }
\text { Total manufacturing overhead costs estimated at the beginning of } \
\text { the year }
\end{array} & \$ 147,000 \
\hline \text { Total direct labor costs estimated at the beginning of the year } & \$ 350,000 \
\hline \text { Total direct labor hours estimated at the beginning of the year } & 15,000 \text { direct labor hours } \
\hline \text { Actual manufacturing overhead costs for the year } & \$ 160,700 \
\hline \text { Actual direct labor costs for the year } & \$ 362,000 \
\hline \text { Actual direct labor hours for the year } & 12,700 \text { direct labor hours } \
\hline
\end{array}$$ Based on the above data,calculate the unadjusted ending balance in the Manufacturing Overhead account.

Question

SES Manufacturing has finished production activities for the year.The company allocates manufacturing overhead based on direct labor costs.The company has provided the following information: $$\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Total manufacturing overhead costs estimated at the beginning of } \
\text { the year }
\end{array} & \$ 147,000 \
\hline \text { Total direct labor costs estimated at the beginning of the year } & \$ 350,000 \
\hline \text { Total direct labor hours estimated at the beginning of the year } & 15,000 \text { direct labor hours } \
\hline \text { Actual manufacturing overhead costs for the year } & \$ 160,700 \
\hline \text { Actual direct labor costs for the year } & \$ 362,000 \
\hline \text { Actual direct labor hours for the year } & 12,700 \text { direct labor hours } \
\hline
\end{array}$$ Based on the above data,calculate the unadjusted ending balance in the Manufacturing Overhead account.

Quizplus · Accepted Answer

The unadjusted ending balance in the Manufacturing Overhead account is calculated by subtracting the actual manufacturing overhead costs from the applied manufacturing overhead. The applied manufacturing overhead is determined by the predetermined overhead rate (based on direct labor costs) multiplied by the actual direct labor costs. Predetermined overhead rate = Estimated overhead costs / Estimated direct labor costs = $147,000 / $350,000 = 0.42. Applied manufacturing overhead = 0.42 * Actual direct labor costs = 0.42 * $362,000 = $152,040. The unadjusted ending balance = Actual overhead costs - Applied overhead = $160,700 - $152,040 = $8,660 debit balance.

SES Manufacturing Has Finished Production Activities for the Year Based on the Above Data,calculate the Unadjusted Ending Balance in Allocates