Question list

Solar Corporation manufactures precision equipment made to order for the semiconductor industry. Solar uses two manufacturing overhead cost

pools$-$one for the overhead costs incurred in its highly automated Machining Department and another for overhead costs incurred in its labour$-$based

Assembly Department. Solar uses a normal costing system. It allocates Machining Department overhead costs to jobs based on actual machine$-$hours

using a budgeted machine$-$hour overhead rate. It allocates Assembly Department overhead costs to jobs based on actual direct

manufacturing labour$-$hours using a budgeted direct manufacturing labour$-$hour rate. The following data are for the year:

Compute the$$ under$-$ or overallocated overhead in each department for the year. Dispose of the$$ under$-$ or overallocated amount in each department using a$.$ immediate$$ write$-$off to Cost of Goods$$ Sold; b$.$ proration based on ending balances$($before proration$)$ in Cost of Goods$$ Sold, Finished$$ Goods, and$$ Work$-$in$-$Process; and c$.$ proration based on the allocated overhead amount$($before proration$)$ in the ending balances of Cost of Goods$$ Sold, Finished$$ Goods, and$$ Work$-$in$-$Process.