Question

The Tse Manufacturing Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500.If the estimated manufacturing overhead for the year was $24,000, and the applied overhead was $26,500, the actual manufacturing overhead cost for the year was:

Answer 1

Answer:

$22,500= real overhead

Explanation:

Giving the following information:

At the end of the year, manufacturing overhead was overapplied by $4,500.The applied overhead was $26,500.

To calculate the actual overhead, we need to use the following formula:

Under/over applied overhead= real overhead - allocated overhead

-4,500= real overhead - 26,500

22,500= real overhead