QUESTION 24

1. (23) Reyes Corporation applies overhead based upon machine-hours using the predetermined overhead rate of $10 per machine hour.

   Budgeted factory overhead was $240,000, and budgeted machine-hours were 24,000 machine hours. Actual overhead cost was $210,000, and actual machine-hours were 25,000 machine hours.

   How much is the over- or under-applied overhead?

   	A.	$40,000 under-applied
   	B.	$40,000 over-applied
   	C.	$30,000 over-applied
   	D.	$30,000 under-applied

4 points

QUESTION 25

1. (24) A company has $10,000 as over-applied overhead at the end of a given period. The following information is given:

   Account Ending balance Overhead applied in the account

   Work-in-process $100,000 $30,000

   Finished goods $80,000 $10,000

   Cost of goods sold $220,000 $60,000

   The Manufacturing overhead Control account has an amount of X.

   The Applied manufacturing overhead account has an amount of Y .

   The company uses the proration method to allocate the under-applied overhead to the above accounts. The necessary journal entry does include a:

   	A.	debit to Manufacturing overhead contol for $10,000.
   	B.	credit to Finished goods for $2,000.
   	C.	Debit to Applied manufacturing overhead for the amount of absolute value of (X - Y).
   	D.	credit to Work-in-process for $3,000.