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If a comp. applies overhead to production on the basis of predetermined rate, a debit balance in the Man.Overhead account at the end of period means?

A) Actual overhead cost was less than the amount of direct labor cost

B) Actual overhead cost was less than the amount charged to production

C) Actual overhead cost was greater than the amount charged to production

D) None of the above

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تم إضافة السؤال من قبل Mir Mujtaba Ali , Internal Audit Manager , Confidential
تاريخ النشر: 2015/02/06
binita nair
من قبل binita nair , Accountant , Globemed Care LLC

C) Actual overhead cost was greater than the amount charged to production

 

Mohammed  Mohammed
من قبل Mohammed Mohammed , Senior SAP Consultant , Abyat Mega Store

C is the correct answer...........

Ahmed kandil
من قبل Ahmed kandil , Cost Controller , Battour Holding Cpompany

Answer C is the correct answer 

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

C) Actual overhead cost was greater than the amount charged to production

 

In other words it is Under Absorption of Manufacturing costs.

Awais Taqi
من قبل Awais Taqi , Assistant Finance Manager , Razia Shafi Life Care Hospital

If the manufacturing overhead cost applied to work in process is more than the manufacturing overhead cost actually incurred during a period, the difference is known as over-applied manufacturing overhead. On the other hand; if the manufacturing overhead cost applied to work in process is less than the manufacturing overhead cost actually incurred during a period,  the difference is known as under-applied manufacturing overhead.

So here it means that the actual cost was greater than the applied cost

Fawzy Ahmed Salim El-Shabiby
من قبل Fawzy Ahmed Salim El-Shabiby , Accountant , Servtel Information, Security, and Telecommunication Network Limited

Ans: C- actual overhead cost was greater than the amount charged to production

 

The predetermined rate can be taken to mean as budgeted rate.

 

so when a budgeted overhead rate is determined and is debited into the account. Later when the actual overhead value is known it will be credited to the account as to set off the budgeted one against the actual one.

When the accounting period is over and when there is more value of actual overhead than the budgeted value there will be more value on the credit side than the debit side and then leaving a debit balance of overhead account.

Vinod Jetley
من قبل Vinod Jetley , Assistant General Manager , State Bank of India

D) None of the above

should be the right answer.

Almutaz Bakry Sidahmed
من قبل Almutaz Bakry Sidahmed , Internal Audit Manager , Banan real estate

I would say the correct answer is absolutely (C) Actual overhead cost was greater than the amount charged to the production.

Alex Al Yazouri
من قبل Alex Al Yazouri , General Manager , Al Mushref Cooperative Society

D)>>>>>>>>>>>>>> None of the above

Khurram Shaukat Memon
من قبل Khurram Shaukat Memon , Academic Research Writer , Freelance Academic Research Writer

My guess here is option (b)

Ans abdela
من قبل Ans abdela , SR .Accounts Receivable Officer , RAk precast FZC

debit balance represent Actual overhead cost was less than the amount charged to production

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