Munoz Corporation uses ABC to determine product costs for external financial reports. At the beginning of the year, management made the following cost and activity estimates in the companys five activity cost pools:

Activity Cost Pool	Activity Measure	Estimated Overhead Cost			Expected Activity
Labour related	Direct labour-hours	$	222,300		28,500	DLHs
Purchase orders	Number of orders		51,060		740	orders
Product testing	Number of tests		156,550		1,550	tests
Template etching	Number of templates		302,760		8,700	templates
General factory	Machine-hours		684,800		53,500	MHs
		$	1,417,470

Required:

1. Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. (Round your answers to 2 decimal places.)

2. During the year, actual overhead cost and activity were recorded as follows:

Activity Cost Pool	Actual Overhead Cost			Actual Activity
Labour related	$	211,190		29,000	DLHs
Purchase orders		56,160		730	orders
Product testing		159,680		1,540	tests
Template etching		296,710		8,550	templates
General factory		698,500		52,000	MHs
Total overhead cost	$	1,422,240

a. Prepare a journal entry to record the incurrence of actual manufacturing overhead cost for the year (credit accounts payable). Post the entry to the companys manufacturing overhead T-account. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

b. Determine the amount of overhead cost applied to production during the year. (Round intermediate calculations to 2 decimal places and final answer to nearest dollar amount.)

c. Prepare a journal entry to record the application of manufacturing overhead cost to work in process for the year. Post the entry to the companys manufacturing overhead T-account. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round intermediate calculations to 2 decimal places and final answers to nearest dollar amount.)

d. Determine the amount of underapplied or overapplied manufacturing overhead for the year. (Round intermediate calculations to 2 decimal places and final answer to nearest dollar amount.)

3. The actual activity for the year was distributed among the companys four products as follows:

Activity Cost Pool	Actual Activity		Product A			Product B			Product C			Product D
Labour related	29,000	DLHs		2,900			8,700			9,650			7,750
Purchase orders	730	orders		160			190			130			250
Product testing	1,540	tests		460			245			215			620
Template etching	8,550	templates		3,420			1,710			855			2,565
General factory	52,000	MHs		15,600			12,480			5,200			18,720

a. Determine the total amount of overhead cost applied to each product. (Round intermediate calculations to 2 decimal places and final answers to nearest dollar amount.)

b. Does the total amount of overhead cost applied to the products above relate to the T-accounts in any way?

multiple choice

Yes

No