Question
Child World Designs makes custom backyard play structures that it sells to dealers across the Midwest. The play structures are produced in two departments,
Child World Designs makes custom backyard play structures that it sells to dealers across the Midwest. The play structures are produced in two departments, fabrication (a mostly automated department) and custom finishing (a mostly manual department). The company uses a normal-costing system in which overhead in the fabrication department is allocated to jobs on the basis of machine-hours and overhead in the finishing department is allocated to jobs based on direct manufacturing labour-hours. During May. Child World Designs reported actual overhead of $34,200 in the fabrication department and $35,500 in the finishing department. Additional information follows: (Click the icon to view the additional information.) Child World Designs prorates under- and overallocated overhead monthly to work in process, finished goods, and cost of goods sold based on the ending balance in each account Required Requirement 1. Calculate the amount of overhead allocated in the fabrication department and the finishing departmen in May Overhead allocated Fabrication Finishing Requirement 2. Calculate the amount of under- or overallocated overhead in each department and in total. (Use parentheses or a minus sign to enter overallocated amounts) Underallocated (Overallocated). Fabrication Finishing Total Requirement 3. How much of the under- or overallocated overhead will be prorated to (a) work-in-process inventory, (b) finished-goods inventory and (c) cost of goods sold based plore proration) in each of the three accounts?
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