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Sagot :
Answer:
Option d ($20,000 Debit balance) is the appropriate option.
Explanation:
The given values are:
Total overhead costs,
= $400,000
Direct labor costs,
= $2,000,000
Actual overhead incurred,
= $380,000
Actual direct labor costs,
= $1,800,000
Now,
As a % of labor cost, the OH will be:
= [tex]\frac{400000}{2000000}\times 100[/tex]
= [tex]20 \ percent[/tex]
The absorbed overhead will be:
= [tex]1800000\times 20 \ percent[/tex]
= [tex]360,000[/tex]
Then,
The balance in overhead account will be:
= Actual overhead incurred - Absorbed overhead
= [tex]380000 - 360000[/tex]
= [tex]20,000[/tex] ($) (Debit balance)
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