Dimanche Company had the following estimates available at the beginning of the year:

Indirect Cost Pool #1 $60,000

Indirect Cost Pool #2 $180,000

Labor hours 40,000

Machine hours 80,000

Dimanche uses labor hours to allocate costs from Cost Pool #1, and machine hours to allocate costs from Cost Pool #2.

The following jobs were started during the year:

Job A1 Prime costs $20,000 Labor hours 5,000 Machine hours 12,000	Job A2 Prime costs $32,000 Labor hours 8,000 Machine hours 20,000
Job A3 Prime costs $26,000 Labor hours 6,500 Machine hours 13,000	Job A4 Prime costs $29,000 Labor hours 6,000 Machine hours 9,000
Job A5 Prime costs $18,000 Labor hours 2,400 Machine hours 540	Job A6 Prime costs $38,000 Labor hours 10,000 Machine hours 30,000

Jobs A3 and A5 were still in process at the end of the year. Job A4 was completed, but had not been sold at the end of the year.

Actual indirect cost information for the year:

Indirect Cost Pool #1 $ 65,000

Indirect Cost Pool #2 $178,000

Assume any over or under-applied overhead amounts are material.

A. Calculate the pre-determined overhead rates for the year.

B. Calculate the total overhead applied to each job. Calculate the total amount of overhead applied during the year.

C. Calculate the amount of over or under applied overhead for the year for each cost pool and for the firm as a whole.

D. Use the Account Balance pro-ration method to dispose of the over or under applied overhead. Make the necessary journal entries, in good form.

E. Use the Allocated (Applied) Overhead pro-ration method to dispose of the over or under applied overhead. Make the necessary journal entries, in good form. (Note: when allocating over or underapplied overhead using the Allocated Overhead method each cost pool must be allocated separately.)

F. Use the Adjusted Allocation Rate (Actual Allocation) method to determine the net adjustment to each job. Do not prepare the journal entries. What is the benefit of using this method?

G. Calculate the total manufacturing cost that will appear as cost of goods sold on Dimanches income statement using 1) the allocations from D and 2) the allocations from E.

1. Calculate the pre-determined overhead rates for the year.

Pre-determined overhead rates = Indirect cost/ Labor hours = $60000/40000hours = $1.5/lhr

Pre-determined overhead rates (machine) = $180000 / 80000 hours = $2.25/mhr

2. Calculate the total overhead applied to each job. Calculate the total amount of overhead applied during the year.

A1: 5000 * 1.5 = 7500 12000*2.25 = 27000 7500+27000 =34500

A2: 8000 * 1.5 = 12000 20000*2.25 = 45000 12000+45000 =57000

A3: 6500 * 1.5 = 9750 13000*2.25 = 29250 9750+29250 =39000

A4: 6000 * 1.5 = 9000 9000*2.25 = 20250 9000+20250 = 29250

A5: 2400 * 1.5 = 3600 540*2.25 = 1215 3600+1215 = 4815

A6: 10000 * 1.5 = 15000 30000*2.25=67500 15000+67500 = 82500

overhead applied = 7500 + 12000 + 9750 + 9000 + 3600 + 15000 = 56850

overhead applied (machine) = 27000 + 45000 + 29250 +20250+1215+67500 = 190215

Total overhead = 56850 + 190215 = 247065

3. Calculate the amount of over or under applied overhead for the year for each cost pool and for the firm as a whole.

Actual indirect cost Pool #1 = $65000

Overhead applied = $56850

Under applied overhead = $65000 - $56850 = $8150

Actual indirect cost Pool #2 = $178000

Overhead applied = $190215

Over applied overhead = $190215 - $178000 = $12215

Total overapplied = $12215 - $8150 = $4065

4. Use the Account Balance pro-ration method to dispose of the over or under applied overhead. Make the necessary journal entries, in good form.

	A1	A2	A3	A4	A5	A6
Prime Costs	20000	32000	26000	29000	18000	38000
Total overhead applied	34500	57000	39000	29250	4815	8250
Total cost	54500	89000	65000	58250	22815	120500

Balance:

WIP = A3 + A5 = $65000 + $22815 = $87815

FG = A4 = $58250

COGS = A1 + A2 + A6 = 54500 + 89000 + 120500 = 264000

Over applied overhead = $4065

WIP = 4065 * 87815) / 87815 + 58250 +264000 = 871

FG = 4065 * 58250) / 87815 + 58250 + 264000 = 577

COGS = 4065 * 264000) / 87815 + 58250+ 264000 = 2617

	Debit	Credit
Manufacturing Overhead	4065
WIP		871
FG		577
COGS		2617

Please answer question E.F.G, thx!