Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,0
ID: 2335147 • Letter: E
Question
Estimated manufacturing overhead $ 500,000
Actual manufacturing overhead $ 550,000
Estimated direct labor hours 10,000 hours
Actual direct labor hours 10,500
13.
Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base.
14.
Determine the amount of overhead allocated during the year. Record the journal entry.
15.
Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing Overhead.
13.
Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base.
14.
Determine the amount of overhead allocated during the year. Record the journal entry.
15.
Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing Overhead.
Explanation / Answer
13 Calculation of predetermined overhead allocation rate Estimated manufacturing overhead (A) $ 500,000.00 Estimated direct labor hours (B) 10,000.00 predetermined overhead allocation rate ( C)=(A)/(B) $ 50.00 14 Calculation of the amount of overhead allocated during the year. Actual direct labor hours (A) 10,500.00 predetermined overhead allocation rate (B) $ 50.00 The amount of overhead allocated during the year ( C)=(A)*(B) $ 525,000.00 Journal Entry Debit Credit Work-in-Process Inventory $ 525,000.00 Manufacturing Overhead $ 525,000.00 To Record to allocate overhead cost for the year. 15 Calculation of amount of underallocated or overallocated overhead Underallocated overhead=$550,000-$525,000 $ 25,000.00 Journal Entry Debit Credit Cost of Goods Sold $ 25,000.00 Manufacturing Overhead $ 25,000.00
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