Fairfield Company applies manufacturing overhead to products at a predetermined

Question

Fairfield Company applies manufacturing overhead to products at a predetermined rate of $66 per direct labor hour. Its actual manufacturing costs for the most recent period are summarized here:

1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet

Record the transfer of manufacturing overhead account balance to cost of goods sold.

Note: Enter debits before credits.

Item Description Total Cost Direct materials Used on Jobs 101 and 102 72,000 Indirect materials Used on multiple jobs 14,600 Hourly labor wages 920 hours @ $33 per hour 170 hours for Job 101 = $ 5,610 320 hours for Job 102 = 10,560 430 hours for Job 103 = 14,190 30,360 Factory supervision 4,150 Production engineer 5,000 Factory janitorial work 1,500 Selling, general, and administrative salaries 8,400 Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.) 6,200 Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.) 4,100

Explanation / Answer

Actual manufacturing overhead =14600 Indirect material +4150 factory supervision+5000 production engineer

      + 1500janitorial+6200 other overhead

     =31450

Applied overhead : Direct labor hours *rate

        = 920*66

          = $ 60720

Overhead overapplied =Actual -applied

        = 31450-60720

           = -29270

Account Debit credit Manufacturing overhead 29270 cost of good sold 29270 [Being overhead overapplied closed]

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