Medusa Products uses a job-order costing system. Overhead costs are applied to jobs on the basis of
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Required:
1. Compute the companys predetermined overhead rate.
2. Assume that during the year the company actually works only 80,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts:
![Medusa Products uses a job-order costing system. Overhead costs](https://dsd5zvtm8ll6.cloudfront.net/si.question.images/image/images4/104-B-M-A-J-O-C(444).png)
Copy the data in the T-accounts above onto your answer sheet. Compute the amount of overhead cost that would be applied to Work in Process for the year, and make the entry in your T-accounts.
3. Compute the amount of underapplied or overapplied overhead for the year, and show the balance in your Manufacturing Overhead T-account. Prepare a journal entry to close out the balance in this account to Cost of Goods Sold.
4. Explain why the manufacturing overhead was underapplied or overapplied for theyear.
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Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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