Problem 3 Lucky's Lawn Gnomes manufactures (you guessed it!) lawn gnomes and uses normal costing. Lucky collects manufacturing overhead expenses in one cost pool, which it allocates based on direct manufacturing labor dollars. The following information is for 2023. Manufacturing Overhead Costs Direct Manufacturing Labor Hours Direct Materials Direct Labor Cost per Hour Budgeted $1,500,000 10,000 $600,000 $20.00 Actual $1,600,000 12,000 $610,000 $21.00 Required: a) What is the allocation rate used for manufacturing overhead for 2023? b) What is the total manufacturing cost charged to WIP for 2023? c) Is overhead over or under-allocated for the period? What is the amount of over or under- allocated overhead for the period? d) Record the journal entry to dispose of the over or under-allocated overhead for the period. Use the direct write-off to COGS method.

Problem 3 Lucky's Lawn Gnomes manufactures (you guessed it!) lawn gnomes and uses normal costing. Lucky collects manufacturing overhead expenses in one cost pool, which it allocates based on direct manufacturing labor dollars. The following information is for 2023. Required: a) What is the allocation rate used for manufacturing overhead for 2023 ? b) What is the total manufacturing cost charged to WIP for 2023 ? c) Is overhead over or under-allocated for the period? What is the amount of over or underallocated overhead for the period? d) Record the journal entry to dispose of the over or under-allocated overhead for the period. Use the direct write-off to COGS method