Danoff Corporation has provided data concerning the company's Manufacturing Overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $68,000 and the total of the credits to the account was $77,000. Which of the following statements is true?
A) Actual manufacturing overhead incurred during the month was $77,000.
B) Manufacturing overhead applied to Work in Process for the month was $68,000.
C) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $68,000.
D) Manufacturing overhead for the month was overapplied by $9,000.

Question

Quizplus · Accepted Answer

The debits to the Manufacturing Overhead account represent actual overhead costs incurred during the month, whereas the credits to the account represent overhead applied to production. Since the total credits exceed the total debits, there is an overapplied overhead balance of $9,000. Therefore, choice D is correct. Choices A, B, and C are incorrect because they do not take the overapplied or underapplied balance into account.

Danoff Corporation Has Provided Data Concerning the Company's Manufacturing Overhead