Accounting for manufacturing overhead Elegant Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2018 follow: Requirements 1. Compute the predetermined overhead allocation rate. Round to two decimal places. 2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account. 3. Prepare the journal entry to adjust for underallocated or overallocated overhead. 4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don't accountants just use the actual manufacturing overhead rate? Machine hours Maintenance labor (repairs to equipment) Plant supervisor's salary Screws, nails, and glue Plant utilities Freight out Depreciation on plant and equipment Advertising expense Estimated 24,500 hours $ 19,000 41,000 21,000 42,000 39,000 83,800 46,000 Actual 32,200 hours $ 27,500 46,000 41,000 97,850 44,500 82,000 60,000 Accounting for manufacturing overhead Elegant Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2018 follow: Requirements 1. Compute the predetermined overhead allocation rate. Round to two decimal places. 2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account. 3. Prepare the journal entry to adjust for underallocated or overallocated overhead. 4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don't accountants just use the actual manufacturing overhead rate? Machine hours Maintenance labor (repairs to equipment) Plant supervisor's salary Screws, nails, and glue Plant utilities Freight out Depreciation on plant and equipment Advertising expense Estimated 24,500 hours $ 19,000 41,000 21,000 42,000 39,000 83,800 46,000 Actual 32,200 hours $ 27,500 46,000 41,000 97,850 44,500 82,000 60,000