A large number of the points on your second test will come from dealing with Manufacturing Overhead.

Remember, Manufacturing Overhead is your Indirect Product Costs.

You will need to be able to do the following:

1) Determine the POHR
2) Determine the amount of Applied Overhead
3) Identify the proper journal entry to record Applied Overhead
4) Determine if a company's overhead is overapplied or underapplied
5) Identify the proper journal entry to close out Manufacturing Overhead to Cost of Goods Sold


There are three Manufacturing Overhead amounts that you have to deal with:

1) Estimated Manufacturing Overhead
2) Applied Manufacturing Overhead
3) Actual Manufacturing Overhead

A) Which one of these is used in calculating the POHR?
B) Which two are used to determine if your overhead is overapplied or underapplied?
C) Which one is recorded as a debit into the WIP account?