The Manufacturing Overhead Applied Account for Cullverin Manufacturing Had Activity

question 5

Essay

The Manufacturing Overhead Applied account for Cullverin Manufacturing had activity of $860 in indirect materials and supplies, $992 in indirect labor, and $4,654 in other overhead costs recorded in the account at April 30 of the current year. The Manufacturing Overhead Applied account had a total of $6,740 in overhead applied during April. What is the over- or underapplied overhead for April? Prepare the journal entry to close the related overhead accounts.

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Definitions:

Legal Obligation

A duty enforceable by law, deriving from statutes, contracts, or legal precedents.

Equitable Obligation

An obligation based on fairness, ethics, or natural law, rather than on a contractual or legal requirement.

Present Obligation

An obligation that arises from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a specific event.