Morris Company Applies Overhead Based on Direct Labor Costs

question 64

Multiple Choice

Morris Company applies overhead based on direct labor costs.For the current year,Morris Company estimated total overhead costs to be $400,000,and direct labor costs to be $2,000,000.Actual overhead costs for the year totaled $380,000,and actual direct labor costs totaled $1,800,000.
-At year-end,the balance in the Factory Overhead account is a:

• A)$380,000 Debit balance.
• B)$360,000 Debit balance.
• C)$20,000 Debit balance.
• D)$400,000 Credit balance.
• E)$20,000 Credit balance.

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Definitions:

Purely Competitive

A market structure characterized by many sellers offering identical products with no single seller able to influence the market price.

Total Revenue

The total amount of money a firm receives from sales of its products or services before any expenses are subtracted.

Quantity Sold

The total number of units of a product or service that have been purchased by consumers during a specific period.

Profit-Maximizing

The method or approach of modifying production and pricing to secure the maximum achievable profit.