Metropolitan Enterprises reports the following information at December 31

Question

Manufacturing Overhead
$4,300
21,000
18,500 $45,500

Requirements
1. What is the actual manufacturing overhead of Metropolitan Enterprises?
2. What is the allocated manufacturing overhead?
3. Is manufacturing overhead underallocated or overallocated? By how much?
What will be an ideal response

Answer 1

1. Actual manufacturing overhead costs are debited to the Manufacturing Overhead account.
Actual manufacturing overhead = $4,300 + 21,000 +18,500
Actual manufacturing overhead = $43,800

2. Allocated manufacturing overhead costs are credited to the Manufacturing Overhead account.
Allocated manufacturing overhead = $45,500

3. Allocated manufacturing overhead costs of $45,500 are greater than actual manufacturing overhead costs of $43,800. Thus manufacturing overhead is overapplied by $1,700.