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Unformatted text preview: accumulated in the OH Control account. At the end of the period, we compare the debit balance in the OH Control with the credit balance in the OH Applied accounts. Note that the OH Control balance is an accurate and firm number. The OH Applied is flimsy and based (partly) on estimates. If the OH Applied (credit) balance is greater than the OH Control (debit) balance you are OVER APPLIED. If the OH Applied (credit) balance is less than the OH Control (debit) balance then you are UNDER APPLIED. In this case, Melissa is OVER APPLIED which means the OH Applied credit balance is greater than the OH Control debit balance ($1,200,000) by $100,000. This means we have APPLIED $1,300,000 to the WIP (etc) accounts. If the OH APPLICATION RATE is $25 per machine hour, then we must have observed 52,000 actual Machine Hours worked during the period ($1,300,000 divided by $25 = 52,000)....
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This homework help was uploaded on 04/02/2008 for the course ACCT 201 taught by Professor Blanchard during the Spring '08 term at University of Arizona- Tucson.
- Spring '08
- Managerial Accounting