1. Lindor Corporation allocates overhead based on machine hours. Selected data for the most recent year follow Estimated manufacturing overhead cost $235,000 Actual manufacturing overhead cost $244,000 Estimated machine hours 20,000 Actual machine hours 22,500 The estimates were made as of the beginning of the year, while the actual results were for the entire year. a. What is the predetermined manufacturing overhead rate per machine hour (5 pts.)? b. Assume the answer to "a" is $15, what is the amount of manufacturing overhead (MOH) allocated for the year, based on machine hours (5 pts.)? c. Based on your answer in "b", is MOH over or under applied, and by how much (4 pts.)? d. Before making any entry to correct for over or under applied overhead, will Net Income be overstated or understated (assuming these goods were sold during the year) (2 pts.)? 2. Provide the appropriately formatted journal entry for each of the following: a. M. Betts Co. ordered and received $50,000 of raw materials, but did not yet pay cash for the inventory (4 pts.). I b. M. Betts Co. used $4,000 of indirect raw materials (4 pts.). C. M. Betts Co. incurred $45,000 of direct labor costs on jobs, but did not yet pay cash for this work (4 pts.) d. At the end of the year, M. Betts Co. determined it had under-allocated manufacturing overhead to jobs by $15,000. Provide the journal entry to correct for this under-allocation (4 pts.). 3. The following is the general structure for the Work in Process t-account. Indicate the three items that are typically included on the Debit (left) side, and the one item that is typically included on the Credit (right) side (6 pts.). Work in Process 1 4 1. 2 2. 3 3. Use the following information for Qs #4 and #5. This information is for the F. Freeman Company for the year 2020. Freeman allocates manufacturing overhead based on direct labor hours. Estimated manufacturing overhead Estimated direct labor hours Actual direct labor hours Estimated direct labor cost Actual direct labor cost Factory depreciation Direct materials used $243,750 35,000 36,000 $325,000 S320,000 S53,700 Factory utilities Indirect labor Sales commissions Factory rent Factory property taxes Indirect materials Corporate website cost $125,000 $15,000 4. What is the sum of the actual manufacturing overhead costs (4 pts.)? Record Answer Here: A) $280,500 B) $236,979 C) $243,750 D) $226,800 E) $250,714 5. Assume WIP Inventory had a balance of $100,000 on 1/1/20 and $120,000 on 12/31/20. Determine the cost of goods manufactured for 2020 (before correcting for over/under applied MOH). Round all numbers to the nearest whole dollar (8 Pts.)
