#5

Suit U produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Suit Up reports the following cost data for the past year:

answers in blue boxes are wrong, please correct

Actual Budget 7,300 hours 7,100 hours $ 20,000 $ 50,500 6,100 hours 6,300 hours $ 20,000 $ 53,500 Direct labor hours ........ Machine hours .. Depreciation on salespeople's autos ........ Indirect materials Depreciation on trucks used to deliver uniforms to customers Depreciation on plant and equipment Indirect manufacturing labor Customer service hotline .. Plant utilities .... Direct labor cost................... $ 12,500 $ 64,000 $ 41,500 $ 18,500 $ 49,900 $ 72,500 $ 11,500 $ 65,500 $ 44,500 $ 19,500 $ 51,400 $ 84,500 Requirement 1. Compute the predetermined manufacturing overhead rate. Enter the formula for predetermined manufacturing overhead rate, then compute the rate. Estimated yearly overhead costs Estimated yearly machine hours = Predetermined overhead rate 188,500 6,500 $ 29 per machine hour Requirement 2. Calculate the allocated manufacturing overhead for the past year. Predetermined overhead rate Actual machine hours 6,700 Manufacturing overhead allocated $ 194,300 29 Roamiromont 2 Comouto the undorollocatodor vorallocatod manufacturing oorhond Houwill thic undorallocated or ouorallocated Requirement 3. Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposed of? First calculate the preliminary manufacturing overhead balance using the T-account. Manufacturing Overhead Close the under-or overallocated overhead to Cost of Goods Sold by journalizing the entry. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Accounts Date Debit Credit Requirement 4. How can managers use accounting information to help control manufacturing overhead costs? To help control manufacturing overhead, managers compare the actual line item amounts for with the budgeted amounts. Managers will also investigate only differences between actual and budgeted amounts to identify the reasons why actual costs