Question
Aspen Company estimates its manufacturing overhead to be $635,000 and its direct labor costs to be $508,000 for year 2. Aspen worked on three jobs
Aspen Company estimates its manufacturing overhead to be $635,000 and its direct labor costs to be $508,000 for year 2. Aspen worked on three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $326,600. Job 2-2, which was completed, but not sold at the end of the year, had actual direct labor costs of $195,960. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of $130,640. Actual manufacturing overhead for year 2 was $803,100. Manufacturing overhead is applied on the basis of direct labor costs.
Required: Prepare an entry to allocate over- or underapplied overhead to Work in Process, Finished Goods and Cost of Goods Sold.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started