Underapplied or Overapplied Manufacturing Overhead (how to dispose of it)

[@PoGoHop360xl]

thanks so much!! 9 years later and your vids are still helping students like me that're struggling in their managerial acct class 🙌🙌

[@liviakaral7665]

helping me understand in 10 minutes what two 4 hours lectures couldn't. can't thank you enough.

[@coledean6009]

Best financial channel on YT!!

[@Edspira]

Wow, thank you for the kind words!

[@DonatoNakes]

The facilitator of this videos really give a good understanding thank you

[@basslover500]

I knew about the formula for allocating the values but I didn't know the logic behind it. But after watching it I now know that we calculate it's percentage in applied FOH and then use the same percentage in over or under applied FOH. Thanks a lot for this informative video.

[@sammi7155]

I was struggling to learn the why MOH would go as a credit account if it was underapplied. This all made so much sense, thank you!

[@saragh1235]

Thank you so much your videos are more usuful than attending classes!

[@northwestfilmcrew3275]

Thank you so much for making these videos. they help a lot!

[@saraserrallonga1532]

I will pass my exam tomorrow thanks to you! thank you a lot for doing this. now i got everything clear

[@KAusBones]

Thank you so much for the video! You explained it better than my prof. It was hard understanding it by just reading the book.

[@Edspira]

Awesome, I'm glad to hear that the video was helpful!

[@TrumanHugh]

I know this is an old video and that you may not see my question, but... What happens if we aren't given (or can't determine) the amounts of MOH in WIP, FG, or COGS?? Can I assume we simply use the total account balances to determine our relative allocation percentages??? Your videos have helped me pass three of the four parts of the CPA exam--BEC in a couple of weeks is all that remains--and I appreciate everything about them! Thanks for helping me better understand all of these concepts!

[@Edspira]

That would not result in an accurate assignment of the under/overallocated MOH in all cases. For example, consider a situation in which Job A went to COGS, Job B went to FG, and Job C went to WIP. Job A might be responsible for 20% of the total cost (of all three jobs combined) but 60% of the MOH (of all the MOH that was applied to the 3 jobs) was applied to Job A. If you were to assign under/overallocated based on the total cost of each job, you would only be assigning 20% of the under/overallocated MOH balance to Job A when clearly it should be assigned much more. Btw, congratulations on passing 3 parts of the CPA exam! I hope you pass the last part with flying colors, and that you enjoy a great career in accounting!

[@shintaroiwata1778]

@@Edspira so how would you determine how much overhead is in each account, simply from dollar figures?

[@MyFinancialFocus]

Cost allocation is key!

[@rob8482]

After I figure these concepts out with your help of course, It seems like I should have just got it, to begin with.Sometimes I just need to watch a video a few times for the whole concept to sink in. Grateful for these easy to understand videos, they really,really help. "The Perpetual Student" Will it ever end??????

[@Edspira]

It's very common to have to re-do homework problems, or re-watch videos in order for a concept to sink in. Hang in there Robert, the end is in sight :)

[@kamenyaiba6250]

tenfold better than my UC university professor.

[@ASMRvideos-ov4dc]

You make it Soo easy for me

[@Edspira]

😀

[@dashorty17]

Explained this way better than my teacher Woww

[@Blackkingt]

How did you get the applied for each of the three accounts ????!?!?!?!?!?!?

[@jennellesardido4795]

This is so helpful, all your videos! thanks a lot.

[@polished_bykimm]

Thank you for making this video! This will help me for my test later on today. Wish me luck!! =)

[@Edspira]

Thanks, and Good luck on your exam!

[@yoshinegus4019]

trust me. If you are right handed you want the right to be bigger than the left. budgeted>actual is good actual>budgeted, BAD!

[@doloresnazas]

excellent and well explained ! Thank you

[@nightthemare4742]

Thank you very much. you describe very well.

[@alexleung842]

I thought applied MOH only goes into WIP. How do you know how much of the applied MOH was applied to WIP, FG, and COGS?

[@basslover500]

by taking the percentage they comprised of the applied foh just divide each of them with the total applied foh and multiply by hundred for the percentage then multiply the percentage with the over/under applied foh to know the values that will be allocated to each of these.

[@samanthavillella2711]

I wish my teacher explained things this clear

[@mmabathosefala]

my question is where do you get the amounts to make up 70 000

[@candiceli1594]

the amount to make up 70000 was the total of the ending balance of WIP, FG, and CGS, 25000 + 10000 + 35000

[@regularbloke7410]

@@candiceli1594 why ending balances are important here?

[@AmDrag5]

this saved me, thanks so much

[@Edspira]

I'm glad it helped! Best wishes

[@marsch000]

What are the effects of allocating the overhead all to COGS and spreading them out?

[@stevefreeman5452]

Since getting out of grad school in 1991, this has been quite an enjoyable refresher. Question however, around 8:49 we are dealing with Underapplied MOH; but you never illustrate OVER applied MOH. Is it the same process, just swapping debits for credits? Pretty sure it is, just wanted to bring it up.

[@Edspira]

You are correct. If the MOH were overapplied, then your journal entries would be the opposite (debited balances would be credited, and credited accounts would be debited).

[@justablob4530]

Why did you add up the wip, fg and cogs? Am I missing the concept that the WIP is just transferred to FG and thats why, the same FOH is applied which the first closing entry states.

[@trattanajariya1]

Do you do the same thing to overapplied?

[@hanaaworld77]

What You gonna do if you have over and under apploed factory over head in credit balance ? And thank you very much 💗

[@BLNKT.]

My professor told us that when we have an over-allocation, we would Debit MOH Allocated for the applied amount, Credit MOH Control for the actual amount, and Credit COGS for the overallocated amount. Why would you do it this way over the way my professor showed?

[@candiceli1594]

he showed steps when MOH is underapplied, for overapplied you just do it backward like what you said

[@sajaalwahaibi2011]

Thank you so much this really helped me

[@raykennethnavarro1013]

Your videos are so helpful Keep it up! :) Godbless

[@chrisarguello1170]

Is manufacturing overhead an inventory account? I’m assuming it gets expensed to cogs once the inventory is sold?

[@KulaniNyoni]

Very useful video, and quite clear. Thank you so much.

[@drakeperez8243]

Would the debit and credit flip for overapplied MOH?

[@leen8175]

yes

[@shadimanci]

Very useful thanks for your efforts :)

[@carolprasad7149]

Very appreciated!!thanks sir!!!!!!👉👏👏

[@pawan2528]

YOU THE MAN

[@jamesdwayne2634]

Where is over applied.......?

[@zawkhunnkhum4234]

Thank you, Sir.

[@Edspira]

No problem!

[@samuelakpenyi8125]

Gracias

[@Silmeria0724]

I have a question. Why are the WIP, FG, and CGS all explained as Credit accounts? Aren`t assets debit by default?

[@Convees]

They are debited and overheads are credited for balancing.

[@loairadwan212]

could you tell me program you use to write online like that?

[@59g9]

Thank you sir!

[@Edspira]

No problem!

[@gbricker9353]

brilliant thank you

[@rupali4197]

Thanx...sir.❣👍

[@francescociccone2224]

Great!

[@TheFedericohiguain2]

Why don’t you divide this in equal parts. How do you decide on the percentages it will be divided?

[@candiceli1594]

you can never tell that the underapplied or overapplied MOH comes from all three parts equally, thats why you need to take the percentage they comprised of the applied MOH just divide each of them with the total applied MOH and multiply by hundred for the percentage then multiply the percentage with the over/under applied MOH to know the values that will be allocated to each of these.

[@ragnar9217]

@@candiceli1594 that's ok, but doesn't MOH go 100% to WIP then 100% to FG and finally 100% to COGS?

[@nadan7145]

Thank you!!

[@haneaordonez3274]

THANKS THANKS

[@darkmatters490]

why is this so hard to understand?

[@Gestr3482]

Thank you. My teacher sucks.

[@Edspira]

No problem!

[@schalkpiek7191]

THANK YOU SIR!