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Denner Company incurred actual manufacturing overhead costs of $260,000 during the year ended December 31, 2016. A total of $350,000 in overhead was applied to jobs. At December 31, 2016, work-in-process inventory totals $100,000, and finished goods inventory totals $300,000. Cost of goods sold before adjustments totals $600,000 for the year.
Required:
a. Is overhead underapplied or overapplied?
b. Close the manufacturing overhead account, assuming the balance is immaterial.
c. Close the manufacturing overhead account, assuming the amount is material.
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