Answer:
The correct answer is $33,000 (Debit).
Explanation:
According to the scenario, the given data are as follows:
Estimated total overhead costs = $452,000
Estimated direct labor cost = $2,260,000
Actual overhead cost = $419,000
Actual direct labor cost = $1,930,000
So, we can calculate factory overhead by the following formula:
First we calculate Estimated overhead rate:
Estimated OH rate = Estimated total overhead costs / Estimated direct labor cost
= $452,000 / $2,260,000 = 0.20
= 20%
Now we calculate actual application
Actual = Actual direct labor cost × Rate of application
= $1,930,000 × 20% = $386,000
So, the balance in OH account can be calculated as:
Balance = Actual overhead cost - Actual cost that should be applied
= $419,000 - $386,000
= $33,000
Hence, the correct answer is $33,000 (Debit).
