Question

Which terms will make the following statement true? When manufacturing overhead is overapplied, the Manufacturing Overhead account has a __________ balance and applied manufacturing overhead is greater than __________ manufacturing overhead.
a) debit, actual
b) credit, actual
c) debit, estimated
d) credit, estimated

Answer 1

Answer:

b) credit, actual

Explanation:

The journal entry to record the over applied overhead is

Cost of Goods sold A/c Dr XXXXXX

      To Manufacturing overhead A/c XXXXXX

(Being the over-applied overhead is recorded)

The over-applied overhead is arise when the applied manufacturing  overhead is more than the actual manufacturing overhead

In mathematically

= Applied manufacturing overhead - actual manufacturing overhead  

= Over-applied