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15 March, 06:21

Echo Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's Finished Goods inventory account was debited for $360,000 and credited for $338,800. The ending balance in the Finished Goods inventory account was $36,600. At the end of the year, manufacturing overhead was overapplied by $15,900. If the applied manufacturing overhead was $169,300, the actual manufacturing overhead cost for the year was:

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  1. 15 March, 09:59
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    Actual overhead = $153,400

    Explanation:

    Giving the following information:

    During the year the company's Finished Goods inventory account was debited for $360,000 and credited for $338,800. The ending balance in the Finished Goods inventory account was $36,600.

    At the end of the year:

    Manufacturing overhead was overapplied by $15,900.

    If the applied manufacturing overhead was $169,300.

    Because the manufacturing overhead was overapplied, we need to subtract from the applied overhead to determine the actual overhead.

    Actual overhead = applied overhead - overapplied overhead

    Actual overhead = 169300 - 15900 = $153,400
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