If Actual Overhead for the Year Is $33,451 and Applied

question 156

Essay

If actual overhead for the year is $33,451 and applied overhead is $32,000,is the overhead variance overapplied or underapplied? Prepare the journal entry necessary to reconcile overhead.Assume the variance is immaterial.
Actual overhead is more than applied overhead so the overhead variance of $1,451 is underapplied.The journal entry would be:

Recognize the different categories of company liabilities.

Understand how business transactions affect the accounting equation.

Identify the impact of changes in liabilities, assets, and owner's equity on the overall financial position of a business.

Learn about the key assumptions underlying financial accounting, including the monetary unit assumption.

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