Question

the following partially completed t-accounts summarize transactions for fabbing corporation during the year

raw materials
debit: beginning balance 4,500, 4,700
credit: 8,000

work in process
debit: beginning balance 3,600, 5,700, 8,000, 7,800
credit: 21,700

finished goods
debit: beginning balance 1,700, 21,700
credit: 15,900

manufacturing overhead
debit: 2,100, 3,000, 2,700
credit: 7,600

wages & salaries payable
debit: 19,900
credit: beginning balance 2,800, 11,000

cost of goods sold
debit: 15,900
credit:

the manufacturing overhead was:

multiple choice
$200 overapplied
$2,900 overapplied
$200 underapplied
$2,900 underapplied

Explanation:

Identify actual overhead

Using the Manufacturing Overhead T-Account knowledge point, we sum the debit entries to find the actual manufacturing overhead costs incurred:

$$ \text{Actual Overhead} = 2,100 + 3,000 + 2,700 = 7,800 $$

Identify applied overhead

Using the Overhead Application knowledge point, we locate the credit entry in the Manufacturing Overhead T-account, which represents the overhead applied to Work in Process:

$$ \text{Applied Overhead} = 7,600 $$

Calculate overhead variance

We find the difference between actual overhead and applied overhead:

$$ \text{Variance} = \text{Actual Overhead} - \text{Applied Overhead} = 7,800 - 7,600 = 200 $$

Determine under/overapplied status

Since actual overhead (\(7,800\)) is greater than applied overhead (\(7,600\)), the overhead is underapplied by \(200\).

Answer:

• (A) $200 overapplied
• (B) $2,900 overapplied
• (C) $200 underapplied (Correct answer)
• (D) $2,900 underapplied