EXERCISE $2$

Assume that the following $T$ accounts represent data from the Blackett Corporation's accounting

records. Blackett uses the materials inventory for direct materials only with a separate supplies account

for indirect materials.

Write the missing amounts represented by the letters $($a$)-($g$)$ next to the letter in each T$-$account.

$($c$)$

$($d$)$

$($f$)$

b$.$ Determine the company's predetermined overhead rate, based on direct material cost. Be sure to

express your answer as a rate.

c$.$ Assume that Blackett desires to allocate overhead variances to Cost of Goods Sold, Work in Process

and Finished Goods, based upon ending balances in each account.

Compute the overhead variance $($specify over$/$underapplied$,$

Based on ending account balances, determine the allocations to the $3$ accounts $($indicated above$)$

and provide a joumal entry $($below$)$ that clears the overhead account.

JOURNAL