Question 1 Ikerd Company applies manufacturing overhead to jobs on the basis of

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Question 1 Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. $341,523 for the year, and machine usage is estimated at 125,100 hours For the year, $427 173 of overhead costs are incurred and 130,100 hours are used Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places eg. 1.25 Manufacturing overhead rate s per machine hour SHOW LIST OF ACCOUNTS What is the amount of under- or overapplied overhead at December 31? Manufacturing Overhead SHOW LIST OF ACCOUNTS Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS Question Attempts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

1) a. Manufacturing Overhead rate = Expected Overhead costs/Expceted Machine hours = $     3,41,523 /       1,25,100 = $           2.73 b. Manufacturing Overhead $   72,000 Under applied Overhead Working: Applied Overhead = Actual Machine Hours x Overhead rate = 130100 x $         2.73 = $     3,55,173 Actual Overhead = $     4,27,173 Applied overhead is less than actual overhead.So there is under applied Overhead. Under Applied Overhead = $     4,27,173 - $   3,55,173 = $       72,000 c. Accoount titles and Explanations Debit credit Work in process $ 72,000 Manufacturng Overhead $ 72,000 (To record under applied manufacturing overhead) 1) Materials Conversions January           49,400         43,520 March           50,400         48,076 July           64,700         50,894 Equivalent Units = Units completed + (Ending Work in process* % of completion) Materials: January       38,900 +       10,500 x 100% =     49,400 March       42,100 +        8,300 x 100% =     50,400 July       47,000 +       17,700 x 100% =     64,700 Conversions: January       38,900 +       10,500 x 44% =     43,520 March       42,100 +        8,300 x 72% =     48,076 July       47,000 +       17,700 x 22% =     50,894

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