(Click the icon to view the actual costs.) Nel Corporation manufactures computer

Question

(Click the icon to view the actual costs.) Nel Corporation manufactures computers. Assume thet The company allocated manufacturing overhead of $150,500 using a predetermined overhead rate of $10.75 per machine hour. The total actual Nell: allocates manufacturing overhead based on machine hours estimated 8,000 machine hours and $86,000 of manufacturing overhead costs manufacturing overhead costs are $82,000. What entry would Nell make to adjust the . . actually used 14,000 machine hours and incurred manufacturing overhead account for overallocated or the following actual costs: underallocated overhead? Date Accounts and Explanation Debit Credit O A. Manufacturing Overhead 4,000 Cost of Goods Sold 4,000 ? B. 11 Cost of Goods Sold 68,500 Manufacturing Overhead 68,500 O C. Manufacturing Overhead 68,500 Cost of Goods Sold 68,500 O D. O D. Cost of Goods Sold 4,000 Manufacturing Overhead 4,000

Explanation / Answer

Ans is C Manufacturing Overhead $          68,500 Cost of goods sold $                        68,500 Explanation: Allocated Overhead $        150,500 (14000 MH x $10.75) Less: Actual Overhead              82,000 Overallocated Overhead $          68,500 Since overhead is overcharged means extra credit is made in Manufacturing overhead so for adjustment extra debit is required by Crediting cost of goods sold in this way effectively cost of goods sold is Reduced by extra amount of over allocation of overhead.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.