The Manufacturing Overhead Applied Account for Djos Domal Company Had

question 82

Essay

The Manufacturing Overhead Applied account for Djos Domal Company had activity of $567 in indirect materials and supplies,$785 in indirect labor,and $3,455 in other overhead costs recorded in the account at August 31 of the current year.The Manufacturing Overhead Applied account had a total of $4,600 in overhead applied during August.What is the over- or underapplied overhead for August? Prepare the journal entry to close the related overhead accounts.

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Definitions:

Diminishing Marginal Product

The principle stating that as one inputs more of a factor of production while holding other inputs constant, the added output produced from each additional unit of the variable input eventually decreases.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, or loan payments.

Marginal Cost

The added expense incurred by creating one more unit of a product or service.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced.