Learning Objectives 3. WIP Bal. $284,000 -304 Accounting for transactions, construction company 360 ons, construction company 36:00 Chi Sunset Construction, Inc. is a home builder in Arizona. Sunset uses a job order coscing system in which cach house is a job. Because constructs houses, the company uses an account titled Construction Overhead. The company applies overhea on estimated direct labor costs. For the year, it estimated construction on r the year, it estimated construction overhead of $1,250,000 and total direct labor cost of $2.500,000. The following events occur during August: a. Purchased materials on account, $440,000. b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. 1.250,000 2 sooloco Direct Materials $ 56,000 65,000 Direct Labor $ 41,000 35,000 House 402 House 403 House 404 House 405 Add All of them 62.000 (57.000 84,000 55,000 c. The company incurred total wages of $210,000. Use the data from Item b to assign the wages. Wages are not yet paid. se d. Depreciation of construction equipment, $6,800.-> Debit renitam Ao Credit Accanelated e. Other overhead costs incurred: Equipment rentals paid in cash, $34,000; Worker liability insurance expired, $6,000. f. Allocated overhead to jobs.u3:45 5 n Actual Buse ( labor costs 1:14. Houses completed: 402, 404. Gh. House sold on account: 404 for $220,000. VE Requirements 1. Calculate Sunset's predetermined overhead allocation rate for the year. 2. Prepare journal entries to record the events in the general journal. od, brass, and Fives 3, 5 manufacturing overhead nufactures jewelry boxes. The primary materials (wood, b, iets. Manufacturing overhead P4-31A Accounting for manufacturing Premium Woods manufactures jewelry glass) and direct labor are assigned directly to the costs are allocated based on machine hours. Data Tine hour 54:00 chine hours. Data for 2016 follow: Estimated 26,500 hours to Machine hours Maintenance labor (repairs to equipment) Plant supervisor's salary Screws, nails, and glue Plant utilities Freight out ng saling ndo Depreciation on plant and equipment Advertising expense no ty Actual 32,600 hours $ 29,500 49,000 48,000 90,850 47,500 84,000 54,000 $12. 43,000 23,000 49,000 35,000 85,000 44,000 doesn't t Requirements 1. Compute the predetermined overhead allocation rate. 2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account. 3. Prepare the journal entry to adjust for underallocated or overallocated overhead. 4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don't accountants just use the actual manufacturing overhead rate? because you cant wait until the end of Peribd