Elegant Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2018 follow:

Requirements
1. Compute the predetermined overhead allocation rate. Round to two decimal places.
2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.
3. Prepare the journal entry to adjust for under allocated or over allocated overhead.
4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don't accountants just use the actual manufacturing overhead rate?

Transcribed Image Text:

Estimated Actual Machine hours 24,500 hours 32,200 hours $ 19,000 $ 27,500 Maintenance labor (repairs to equipment) Plant supervisor's salary Screws, nails, and glue 41,000 46,000 21,000 41,000 Plant utilities 42,000 97,850 Freight out 39,000 44,500 Depreciation on plant and equipment 83,800 82,000 Advertising expense 46,000 60,000