Question
Closing Manufacturing Overhead: Two Approaches. Placer Company incurred actual manufacturing overhead costs of $260,000 during the year ended December 31, 2012. A total of $350,000
Closing Manufacturing Overhead: Two Approaches. Placer
Company incurred actual manufacturing overhead costs of
$260,000 during the year ended December 31, 2012. A total of
$350,000 in overhead was applied to jobs. At December 31, 2012,
work-in-process inventory totals $100,000, and finished goods
inventory totals $300,000. Cost of goods sold before adjustments
totals $600,000 for the year.
Required:
1. Is overhead underapplied or overapplied?
2. Close the manufacturing overhead account,
assuming the balance is immaterial.
3. Close the manufacturing overhead account,
assuming the amount is material.
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