Item 3Item 3 Manufacturing overhead was estimated to be $385,700 for the year along with 20,300 direct labor hours. Actual manufacturing overhead was $423,400, and actual labor hours were 21,600. The amount debited to the Manufacturing Overhead account would be:

Question

Eliza Frye

Business

13 July, 23:33

Item 3Item 3 Manufacturing overhead was estimated to be $385,700 for the year along with 20,300 direct labor hours. Actual manufacturing overhead was $423,400, and actual labor hours were 21,600. The amount debited to the Manufacturing Overhead account would be:

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Answers (1)

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Alonso Cantrell · Answer 1

Debit manufacturing overhead with actual overhead incurred-$423,400

Explanation:

Absorbed overhead = Overhead absorption rate (OAR) * actual direct labour hours

OAR = Budgeted overhead / Budgeted labour hours

= $385,700/20,300 hours=

Absorbed overhead = $19 * 21,600 = $410,400

Absorbed overhead = $410,400.

In accounting for overhead the following entries would be observed

Debit manufacturing overhead with actual overhead incurred-$423,400

And credit manufacturing overhead with absorbed overhead - $410,400

The difference of $13000 is the over absorbed overhead