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Ignoring Part 1, at what rate would the PDOH rate need to be for there to be NO under or over applied overhead assuming that

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  1. Ignoring Part 1, at what rate would the PDOH rate need to be for there to be NO under or over applied overhead assuming that the estimated computers hours is 80,000 hours?
  2. Assume that the company closes 100,000 of underapplied overhead directly to COGS. Prepare the appropriate journal entry.
  3. Assume that the company allocates the 100,000 underapplied overhead to WIP. Finished Goods and COGS on the basis of the amount of overhead applied during the year that remains in each account at the end of the year.

Balances of the Accounts at Year End:

WIP - 43,200

Fin Goods - 280,800

COGS - 756,000

Prepare the appropriate Journal Entry

  1. How much higher or lower will net operating income by for the year if the undersupplied overhead of 100,000 is allocated rather than closed to COGS?
Question 25 Boros Inc is a state of the art manufacturing company utilizing the latest in robotics and computers to control production. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer hours. Bozos used the following estimated information to calculate the predetermined overhead rate a the beginning of the years Computer Hours 80.000 Unfortunately, the economy went into recession during the year and resulted in inventory building up and a necessary cutback in production. The following actual cost information and operating data as follows: Computer Hours 85,000 Manufacturing Overhead Cost 2.200.000 Inventories at year-end Raw Materials 500.000 Work in process $ 200,000 Finished Goods 1,050,000 Cost of Goods Sold 2,900,000 $ $ A A A A What was the PDOH rate per hour if manufacturing overhead was underapplied by 75,000 for the year

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