Exercise 19-15 Factory overhead computed, applied, and adjusted LO P3, P4 Comple
ID: 2544889 • Letter: E
Question
Exercise 19-15 Factory overhead computed, applied, and adjusted LO P3, P4 Complete this question by entering your answers in the tabs below. In December 2016, Custom M'g. established its predetenmined overhead rate for jobs prccuced during 2017 by using the fo owing cost predictions: overheed costs, 640.000, and direct materials costs, $200,000. At year-end 2017, the company's records snow that actual averhend casts for the year are $1,689,30a Actual direct material cost had been assigned to jobs as follows Req Req 2 and 3 Req Derermine the predetemined averhead rate for 2017. Qverhead Bate Tobe in vork in procose inventory Total actual diroet aterials co Choosc Cvarhead rato 1. Determine the predete mined overhead rate for 2017 2&3. Enter the overhead costs incurred and the mounts applied during the year using the predetermined overheed rete and determine whether averhend is averapplied or underapplied. 4. Prepare the adjusting entry to allocate eny over- or underapplied overneed to Cost of Goods Scld. Req 2 and 3 > Req 1 Ra 2 and3 Enter the averhead costs inaurred and the amouns appled during the vear using the predetermined overtead rate and datermine whether averncad a ovcroppied or underapplicd. Roq 1 Req4 > Record entry to allccate underapplied /overapplied werhead Date Dcbit Credit Occ 31Explanation / Answer
Req 1: PRE-DETERMINED OVERHEAD RATE Estimated Overheads / Estimated direct material cost = OH rate 640000 / 200000 = 320% Req 2& 3: Overheads applied: Material cost OH rate OH applied Jobs completed and sold 400000 320% 1280000 Jobs finished 71000 320% 227200 Jobs in WIP 54000 320% 172800 Total 525000 OH applied 1,680,000 Under/Overe-applied Overhehads: Overheads incurred 1689300 Less: Overheads applied 1,680,000 Under-applied overheads 9300 Req 4: JOURNAL ENTRY: Cost of Goods sold Account Dr. 9300 Manufacturing Overheads 9300 (for under-applied overheads charged to COGS)
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