Question
A company transport assembles pieces of equipment. its normal costing system has two direct cost categories (direct materials and direct labor). Company uses machine hours
A company transport assembles pieces of equipment. its normal costing system has two direct cost categories (direct materials and direct labor). Company uses machine hours its allocation base. For 2018 it budgeted $5000 for all its overhead cost, expecting to use 2000 machine hours
Transactions/ cost during 2018
Materials and supplies purchases on credit 4700
DM used 4400
Direct manufacturing labor 2500
Indirect mftg labor incurred by production dep. 1200
Depreciation on plant and equip 2200
Utility cost 900
Manufacturiung overhead allocated (based on 1900 machine hours used) ?
Cost of goods manufactured 10000
Sales (all on credit) 35000
Cost of goods sold 8000
Questions:
- Use t accounts for DM inventory ( D150) WIP inventory ( D200) FG inventory ( D300) COGS and MFTG overhead control
- clearly specify whether this company manufacturing overhead is under or over applied and by how much
- Record journal entries to dispose of any under or over allocated manufacturing overhead
- Is this a write off approach for disposing of the under or over allocated overhead? why or why not
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To address the questions lets break them down into steps Step 1 Set Up TAccounts Lets start by setting up the necessary Taccounts for Direct Materials ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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