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 company's five activity cost pools: Activity Cost Pool Labour related Purchase orders Product testing Template etching General factory Activity Measure Direct labour-hours Number of orders Number of tests Number of templates Machine-hours Estimated Overhead Cost $ 214, 200 55, 080 121, 380 321, 300 892, 500 $ 1,604, 460 Expected Activity 29,750 DLHS 765 orders 1,200 tests 8,950 templates 59,500 MHS 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.) Activity Cost Pool Labour related Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH 2. During the year, actual overhead cost and activity were recorded as follows: Actual Overhead Cost Activity Cost Pool Labour related Purchase orders Product testing Template etching General factory Total overhead cost $ 202, 130 56, 610 122, 400 316, 030 911, 625 $ 1,608, 795 Actual Activity 30, 200 DLHs 760 orders 1, 105 tests 8,775 templates 57, 800 MHS 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 company's manufacturing overhead T-account. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) Journal entry worksheet 1 Record actual manufacturing overhead incurred for production. Note: Enter debits before credits. General Journal Debit Credit Transaction 1 Record entry Clear entry View general journal Manufacturing Overhead 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.) Overhead cost applied 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 company's 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.) Journal entry worksheet 1 Record applied manufacturing overhead based on predetermined overhead rate. Note: Enter debits before credits. General Journal Debit Credit Transaction 1 Manufacturing Overhead 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.) manufacturing overhead 3. The actual activity for the year was distributed among the company's four products as follows: Activity Cost Pool Labour related Purchase orders Product testing Template etching General factory Actual Activity 30, 200 DLHS 760 orders 1, 105 tests 8,775 templates 57, 800 MHS Product A 3, 200 140 310 3, 750 16,580 Product B 8, 800 205 160 1,270 12,590 Product C 9,500 120 145 860 6, 800 Product D 8, 700 295 490 2,895 21,830 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.) Total Overhead Cost Product A Product B Product C Product D
