Alba Foundry uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs, based on the machine hours required.

At the beginning of 2009, the company expected to incur the following:

At the end of 2009, the company had actually incurred:

Requirements 

1. Compute AJba's predetermined manufacturing overhead rate.

2. Record the summary journal entry tor allocating manufacturing overhead,

3. Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. Is manufacturing overhead under allocated or overallocated? By how much?

4. Close the Manufacturing Overhead account to Cost of Goods Sold. Does your entry increase or decrease cost of goods sold?

Transcribed Image Text:

Manufacturing overhead costs. Direct labor cost.. Machine hours...... $ 600,000 1,500,000 60,000