Archangel Manufacturing has just finished the year 2012. They created a predeter

Q: Archangel Manufacturing has just finished the year 2012. They created a predeter

Predetermined overhead rate = 140,000/350,000 =40% Manufacturing account Actual 159,000 Applied (362,000@40%) $144,800 Balance $14,200 Debit balance of $14,200 Predetermined overhead rate = 140,000/350,000 =40% Manufacturing account Actual 159,000 Applied (362,000@40%) $144,800 Balance $14,200 Debit balance of $14,200

ID: 2468650 • Letter: A

Question

Archangel Manufacturing has just finished the year 2012. They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. Below are various data: Total manufacturing overhead estimated at the beginning of the year: $140,000 Total direct labor costs estimated at the beginning of the year: $350,000 Total direct labor hours estimated at the beginning of the year: 12,000 direct labor hours Actual manufacturing overhead costs for the year $159,000 Actual direct labor costs for the year: $362,000 Actual direct labor hours for the year: 12,400 direct labor hours Based on the data above, what was the preliminary ending balance in the manufacturing overhead account, prior to the year-end adjustment to clear the balance to zero? (Please round to nearest whole dollar.)

Explanation / Answer

Predetermined overhead rate = 140,000/350,000

=40%

Manufacturing account

Actual

159,000

Applied

(362,000@40%)

$144,800

Balance

$14,200

Debit balance of $14,200