Sagon Corporation has provided data concerning the Corporati

Sagon Corporation has provided data concerning the Corporation\'s Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $87,000 and the total of the credits to the account was $62,000. Which of the following statements is true? Multiple Choice Actual manufacturing overhead incurred during the month was $62,000. Manufacturing overhead applied to Work in Process for the month was $87,000. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $87,000. Manufacturing overhead for the month was underapplied by $25,000.

Solution

Answer:

Manufacturing overhead for the month was underapplied by $25,000.

Manufacturing overhead underapplied = Total of the debit to the manufacturing overhead - Total of the credit to the manufacturing overhead

Manufacturing overhead underapplied = $87,000 - $62,000 = $25,000.