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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
- 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?
- Assume that the company closes 100,000 of underapplied overhead directly to COGS. Prepare the appropriate journal entry.
- 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
- 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?
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