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	$	131,300		25,250	DLHs
Purchase orders	Number of orders		34,160		610	orders
Product testing	Number of tests		85,050		900	tests
Template etching	Number of templates		259,210		8,050	templates
General factory	Machine-hours		512,550		50,250	MHs
		$	1,022,270

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	$	124,740		25,750	DLHs
Purchase orders		37,580		600	orders
Product testing		86,750		890	tests
Template etching		254,030		7,900	templates
General factory		522,800		48,750	MHs
Total overhead cost	$	1,025,900

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	25,750	DLHs		2,600			7,700			8,600			6,850
Purchase orders	600	orders		130			155			110			205
Product testing	890	tests		270			140			125			355
Template etching	7,900	templates		3,160			1,580			790			2,370
General factory	48,750	MHs		14,625			11,700			4,875			17,550

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