Requirement 1. Calculate the amount of overhead allocated in the

fabrication

department and the

finishing

department in

May.

	Overhead allocated
Fabrication
Finishing

Requirement 2. Calculate the amount of under- or overallocated overhead in each department and in total. (Use parentheses or a minus sign to enter overallocated amounts.)

	Underallocated (Overallocated)
Fabrication
Finishing
Total

Requirement 3. How much of the under- or overallocated overhead will be prorated to (a) work-in-process inventory, (b) finished-goods inventory, and (c) cost of goods sold based on the ending balance (before proration) in each of the three accounts?

	Proration of
	(over) under MOH
Work-in-Process
Finished Goods
Cost of Goods Sold

What will be the balance in work-in-process, finished goods, and cost of goods sold after proration?

	Ending Balance
	(adjusted)
Work-in-Process
Finished Goods
Cost of Goods Sold

Requirement 4. What would be the effect of writing off under- and overallocated overhead to cost of goods sold? Would it be reasonable for

Happy Place

Designs to change to this simpler method? (Enter percentage values rounded to the nearest tenth percent, X.X%.)

If the writeoff approach is used, the ending balance in Cost of Goods Sold would be $					. Cost of
Goods Sold would			%. Because this is		amount it
	to use the simpler method of charging off to Cost of Goods Sold.

Manufacturing overhead rate (fabrication department) Manufacturing overhead rate (finishing department) Machine-hours (fabrication department) for May Direct manuf. labor-hours (finishing department) for May Work-in-process inventory, May 31 Finished-goods inventory, May 31 Cost of goods sold, May $11 per machine-hour $23 per direct manuf. labor-hour 2,700 machine-hours 2,000 labor-hours 58,000 174,000 348,000 $ $ $ Happy Place Designs makes custom backyard play structures that it sells to dealers across the Midwest. The play structures are produced in two departments, fabrication (a mostly automated department) and custom finishing (a mostly manual department). The company uses a normal-costing system in which overhead in the fabrication department is allocated to jobs on the basis of machine-hours and overhead in the finishing department is allocated to jobs based on direct manufacturing labor-hours. During May, Happy Place Designs reported actual overhead of $34,200 in the fabrication department and $49,500 in the finishing department. 1. Calculate the amount of overhead allocated in the fabrication department and the finishing department in May. 2. Calculate the amount of under- or overallocated overhead in each department and in total. 3. How much of the under- or overallocated overhead will be prorated to (a) work-in- process inventory, (b) finished-goods inventory, and (c) cost of goods sold based on the ending balance before proration) in each of the three accounts? What will be the balance in work-in-process, finished goods, and cost of goods sold after proration? 1. What would be the effect of writing off under- and overallocated overhead to cost of goods sold? Would it be reasonable for Happy Place Designs to change to this simpler method