Prob 4-30 (c)

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Assume that ErgoFurn closes under- or overapplied overhead to the Cost of Goods Sold account. Prepare the journal entry to close the manufacturing overhead account.(Credit account titles are automatically indented when the amount is entered. Do not indent manually.)Account Titles and Explanation

Problem 4-30 (Part Level Submission) ErgoFurn, Inc. manufactures ergonomically designed computer furniture. ErgoFurn uses a job order costing system. On Nove following jobs: Job No. Item Units CC723 Computer caddy 20,000 CH291 Chair 15,000 PS812 Printer stand 25,000 On November 30, ErgoFurn's Raw Materials Inventory account totaled $668,000, and its Finished Goods Inventory totaled $3 the basis of machine hours. The company's manufacturing overhead budget for the year totaled $4,500,000, and the compa year. Through the first eleven months of the year, the company used a total of 830,000 machine hours, total manufacturing Sold was $8,750,250. ErgoFurn purchased $638,000 in raw materials in December and incurred the following costs for jobs in process that month: Materials Machine Issued Hours Job No. CC723 $155,000 12,000 CH291 $13,800 4,400 PS812 $211,000 19,500 DS444 $252,000 14,000 The following jobs were completed in December and transferred to the Finished Goods Inventory: Job No. Item Units CC723 Computer caddy 20,000 CH291 Chair 15,000 DS444 Desk 5,000 Assume that ErgoFurn sold 15,000 computer caddies, 12,000 chairs, and 4,500 desks in December. (a) Calculations C. Below Assume that ErgoFurn closes under- or overapplied overhead to the Cost of Goods Sold account. Prepare the journal entry to close the manufacturing overhead account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit costing system. On November 30, the Work in Process Inventory consisted of the Accumulated Cost $900,000 431,000 250,000 $1,581,000 oods Inventory totaled $3,456,400. ErgoFurn applies manufacturing overhead on 4,500,000, and the company planned to use 900,000 machine hours during the ours, total manufacturing overhead amounted to $4,274,500, and Cost of Goods bs in process that month: Direct Labor Direct Labor Hours Cost 11,600 $122,400 3,600 $43,200 14,300 $200,500 12,500 $138,000 ErgoFurn incurred $395,000 in manufacturing overhead in December. Given that expenditure, was manufacturing overhead underor overapplied for the year? By how much? Overhead Underapplied by $ 270,000 4,669,500 879,900 5 4,399,500 270,000