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Budget Actual Direct labor hours . . . . . . . . . . . . . . . . . . . .
| Budget | Actual | ||
Direct labor hours. . . . . . . . . . . . . . . . . . . . . . . . | 7,600 | hours | 6,100 | hours |
Machine hours. . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,000 | hours | 6,500 | hours |
Depreciation on salespeople's autos. . . . . . . . . . . | $21,500 | $21,500 | ||
Indirect materials. . . . . . . . . . . . . . . . . . . . . . . . . | $49,000 | $54,500 | ||
Depreciation on trucks used to deliver uniforms | | | ||
to customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $13,000 | $10,500 | ||
Depreciation on plant and equipment. . . . . . . . . . . | $66,000 | $67,000 | ||
Indirect manufacturing labor. . . . . . . . . . . . . . . . . | $39,000 | $40,000 | ||
Customer service hotline. . . . . . . . . . . . . . . . . . . | $19,500 | $21,000 | ||
Plant utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . | $35,000 | $37,500 | ||
Direct labor cost. . . . . . . . . . . . . . . . . . . . . . . . . | | $71,000 | | $86,000 |
Requirement 1. Compute the predetermined manufacturing overhead rate.
Enter the formula for predetermined manufacturing overhead? rate, then compute the rate.
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| / | Estimated yearly machine hours | = | Predetermined overhead rate |
| | / | | = | per machine hour |
Requirement 2. Calculate the allocated manufacturing overhead for the past year.
| | | | | | Manufacturing | | ||
| Actual machine hours | x |
| | = | overhead allocated | | ||
| x | | = | |
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 | |||||
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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 | ||||
Date | Accounts | Debit | Credit | |
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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
?
depreciation on delivery trucks
finished goods inventory
manufacturing overhead
work in process inventory
?
small
large
?
are the same as planned or budgeted costs
are the same as previous years costs
differ from planned or budgeted costs
differ from previous years costs
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