Regal Company produces hospital uniforms. The companyallocates manufacturing ove

Question

Regal Company produces hospital uniforms. The companyallocates manufacturing overhead based on the machine hours eachjob uses. Regal reports the following cost data for 2009:                                                                                                                                               Budget                           Actual Machinehours                                                               7,000hours                     6,500hours Indirectmaterials                                                            50,000                             52,000 Depreciation on trucks used to deliver uniforms tocustomers                                                                   14,000                              12,000 Depreciation on plant andequipment                              65,000                              67,000 Indirect manufacturinglabor                                          40,000                              43,000 Customer servicehotline                                                19,000                               21,000 Plantutilities                                                                  27,000                              20,000 Requirements: 1. Compute the predetermined manufacturing overheadrate. 2. Post actual and allocated manufacturing overhead to themanufacturing overhead T-account. 3. Close the under-or overallocated overhead to Cost of GoodsSold. I could not understand on how to get these answers. I wasconfused on this problem. Regal Company produces hospital uniforms. The companyallocates manufacturing overhead based on the machine hours eachjob uses. Regal reports the following cost data for 2009:                                                                                                                                               Budget                           Actual Machinehours                                                               7,000hours                     6,500hours Indirectmaterials                                                            50,000                             52,000 Depreciation on trucks used to deliver uniforms tocustomers                                                                   14,000                              12,000 Depreciation on plant andequipment                              65,000                              67,000 Indirect manufacturinglabor                                          40,000                              43,000 Customer servicehotline                                                19,000                               21,000 Plantutilities                                                                  27,000                              20,000 Requirements: 1. Compute the predetermined manufacturing overheadrate. 2. Post actual and allocated manufacturing overhead to themanufacturing overhead T-account. 3. Close the under-or overallocated overhead to Cost of GoodsSold. I could not understand on how to get these answers. I wasconfused on this problem.

Explanation / Answer

Budgeted

Actual

1 Details

Budgeted

Actual

Indirect Material 50,000.00 52,000.00 Depreciation - Plant & Equipment 65,000.00 67,000.00 Indirect Manufacturing Labor 40,000.00 43,000.00 Customer Service Hotline 19,000.00 21,000.00 Plant Utilities 27,000.00 20,000.00 Total Manufacturing Overhead 201,000.00 203,000.00 Machine Hours 7,000.00 6,500.00 Overhead Rate 28.71 31.23 Depreciation on Delivery Trucks is not considered apart of manufacturing overhead. It is considerd a part of selling overhead. Manufacturing Overhead Applied 28.71 * 6500 186,615.00 Journal Entry 2 Work in ProcessInventory        186,615               ManufacturingOverhead       186,615   3 Cost of GoodsSold                    16,385 203,000 -186,615         ManufacturingOverhead               16 , 385

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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