Prob 4-30 Essay

See attached excel sheet

Assume that actual overhead for the year was $4,669,500 and that applied overhead was $4,399,500. Why was overhead under- or overapplied for the year?

Which method of under- or overapplied overhead disposition is more appropriate for ErgoFurn: (1) assigning it all to Cost of Goods Sold or; (2) Prorating it to Work in Process, Finished Goods and Cost of Goods Sold. Why?

Problem 4-30 (Essay) ErgoFurn, Inc. manufactures ergonomically designed computer furniture. ErgoFurn uses a job order costing system. On Nove 30, the Work in Process Inventory consisted of the following jobs: Job No. Item Units Accumulated Cost CC723 Computer caddy 20,000 $900,000 CH291 Chair 15,000 431,000 PS812 Printer stand 25,000 250,000 $1,581,000 On November 30, ErgoFurn's Raw Materials Inventory account totaled $668,000, and its Finished Goods Inventory totaled $3,456,400. ErgoFurn applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhe budget for the year totaled $4,500,000, and the company planned to use 900,000 machine hours during the year. Through t first eleven months of the year, the company used a total of 830,000 machine hours, total manufacturing overhead amounte $4,274,500, and Cost of Goods 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: Job No. Materials Machine Direct Labor Issued Hours Hours CC723 $155,000 12,000 11,600 CH291 $13,800 4,400 3,600 PS812 $211,000 19,500 14,300 DS444 $252,000 14,000 12,500 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 ErgoFurn incurred $395,000 in manufacturing overhead in December. Assume that actual overhead for the year was $4,669,500 and that applied overhead was $4,399,500. Why was overhead under- or overapplied for the year? LINK TO TEXT LINK TO VIDEO Which method of under- or overapplied overhead disposition is more appropriate for ErgoFurn: (1) assigning it all to Cost of Goods Sold or; (2) Prorating it to Work in Process, Finished Goods and Cost of Goods Sold. Why? der costing system. On November mulated Cost d Goods Inventory totaled pany's manufacturing overhead rs during the year. Through the ufacturing overhead amounted to jobs in process that month: y: Direct Labor Cost $122,400 $43,200 $200,500 $138,000