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	$	253,700		29,500	DLHs
Purchase orders	Number of orders		56,940		780	orders
Product testing	Number of tests		180,250		1,750	tests
Template etching	Number of templates		316,840		8,900	templates
General factory	Machine-hours		741,200		54,500	MHs
		$	1,548,930

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	$	241,020		30,000	DLHs
Purchase orders		62,640		770	orders
Product testing		183,850		1,740	tests
Template etching		310,500		8,750	templates
General factory		756,000		53,000	MHs
Total overhead cost	$	1,554,010

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	30,000	DLHs		3,000			9,000			10,000			8,000
Purchase orders	770	orders		170			200			140			260
Product testing	1,740	tests		520			280			240			700
Template etching	8,750	templates		3,500			1,750			875			2,625
General factory	53,000	MHs		15,900			12,720			5,300			19,080

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