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Applied vs. Actual Manufacturing Overhead Davis Manufacturing Corporation applies manufacturing overhead on the basis of 140% of direct labor cost. An analysis of the related
Applied vs. Actual Manufacturing Overhead Davis Manufacturing Corporation applies manufacturing overhead on the basis of 140% of direct labor cost. An analysis of the related accounts and job order cost sheet indicates that during the year total manufacturing overhead incurred was $315,000 and that at yearend Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $40,000,$20,000, and $140,000, respectively, of direct labor incurred during the current year. a. Determine the under applied manufacturing overhead at year-end (assume it is significant). Under-applied manufacturing overhead \$ b. Prepare a journal entry to record the disposition of the underapplied manufacturing overhead
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