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	$	185,300		27,250	DLHs
Purchase orders	Number of orders		44,160		690	orders
Product testing	Number of tests		128,050		1,300	tests
Template etching	Number of templates		285,610		8,450	templates
General factory	Machine-hours		616,550		52,250	MHs
		$	1,259,670

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	$	176,040		27,750	DLHs
Purchase orders		48,570		680	orders
Product testing		130,610		1,290	tests
Template etching		279,900		8,300	templates
General factory		628,900		50,750	MHs
Total overhead cost	$	1,264,020

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	27,750	DLHs		2,800			8,300			9,250			7,400
Purchase orders	680	orders		150			180			120			230
Product testing	1,290	tests		390			205			175			520
Template etching	8,300	templates		3,320			1,660			830			2,490
General factory	50,750	MHs		15,225			12,180			5,075			18,270

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