Which terms will make the following statement true? When manufacturing overhead

Question

Which terms will make the following statement true? When manufacturing overhead is overapplied, the Manufacturing Overhead account has a __________ balance and applied manufacturing overhead is greater than __________ manufacturing overhead. Select one: a. debit, actual b. credit, actual c. debit, estimated d. credit, estimated
Select one: a. 83% and $5 b. 83% and $3 c. 120% and $3 d. 83% and $120 In May, Hervey Inc. incurred $60,000 of direct labor costs and $3,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: Select one: a. credit to Manufacturing Overhead of $3,000 b. debit to Work in Process of $63,000 c. credit to Work in Process of $63,000 d. debit to Manufacturing Overhead of $3,000 Select one: a. 83% and $5 b. 83% and $3 c. 120% and $3 d. 83% and $120 In May, Hervey Inc. incurred $60,000 of direct labor costs and $3,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: Select one: a. credit to Manufacturing Overhead of $3,000 b. debit to Work in Process of $63,000 c. credit to Work in Process of $63,000 d. debit to Manufacturing Overhead of $3,000 a. 83% and $5 b. 83% and $3 c. 120% and $3 d. 83% and $120 In May, Hervey Inc. incurred $60,000 of direct labor costs and $3,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: Select one: a. credit to Manufacturing Overhead of $3,000 b. debit to Work in Process of $63,000 c. credit to Work in Process of $63,000 d. debit to Manufacturing Overhead of $3,000 In May, Hervey Inc. incurred $60,000 of direct labor costs and $3,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: Select one: a. credit to Manufacturing Overhead of $3,000 b. debit to Work in Process of $63,000 c. credit to Work in Process of $63,000 d. debit to Manufacturing Overhead of $3,000 Select one: a. credit to Manufacturing Overhead of $3,000 b. debit to Work in Process of $63,000 c. credit to Work in Process of $63,000 d. debit to Manufacturing Overhead of $3,000 a. credit to Manufacturing Overhead of $3,000 b. debit to Work in Process of $63,000 c. credit to Work in Process of $63,000 d. debit to Manufacturing Overhead of $3,000

Explanation / Answer

1. b. credit, actual

2. c. 120% and $3

3. d. debit to Manufacturing Overhead of $3,000

reasons:

1)APPLIED Overhead is computed using the predetermined overhead rate and is the amount of costs applied (or estimated) to be allocated (needed) for specific jobs.

ACTUAL Overhead is found after the manufacturing process is complete which gives the actual amount of used/consumed resources (or total costs) that it needed to complete the job.

2)For DEPARTMENT A:

You must use Direct labor cost because the question says "labor cost basis in Department A."
POR = Manufacturing Overhead / Direct Labor Cost
= $67,200 / $56,000
= 1.2
= 120% (by converting decimal to percent form).


For DEPARTMENT B:
You must use Machine-hours because the question says "machine-hour basis in Department B."
POR = Manufacturing Overhead / Machine-Hours
= $45,000 / 15,000
= $3 per machine-hour

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