Answer:
$20,000 debit balance
Explanation:
Overhead is meant to absorbed at 20% of direct labor costs
absorbed overhead=20%*direct labor costs
direct labor costs is $1,800,000
absorbed overhead as a percentage of labor costs=20%*$1,800,000=$360,000
Balance in factory overhead account=actual overhead-overhead absorbed
actual overhead is $380,000
balance in factory overhead account=$380,000-$360,000=$20,000
The balance in factory overhead account is $20,000 debit balance since the amount absorbed is less than actual,an additional cost of $20,000 needs to be recognized
