Rondell Company uses a standard cost system. Indirect costs were budgeted at $200,000 plus $15 per direct labour hour. The overhead rate is based on 10,000 hours. Actual results were:

Standard direct labour hours allowed		9,000
Actual direct labour hours		10,000
Fixed overhead		$190,000
Variable overhead		$185,000

(a)

Journalize the incurrence of the overhead costs and the application of overhead to the job, assuming a standard cost accounting system is used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

enter an account title to record incurrence of overhead Manufacturing OverheadOverhead Budget VarianceOverhead Volume VarianceCash, Accounts PayableWork in Process InventoryMaterials Quantity Variance

enter a debit amount

enter a credit amount

enter an account title to record incurrence of overhead Manufacturing OverheadOverhead Budget VarianceOverhead Volume VarianceCash, Accounts PayableWork in Process InventoryMaterials Quantity Variance

enter a debit amount

enter a credit amount

(To record incurrence of overhead.)

enter an account title to record application of overhead Manufacturing OverheadOverhead Budget VarianceOverhead Volume VarianceCash, Accounts PayableWork in Process InventoryMaterials Quantity Variance

enter a debit amount

enter a credit amount

enter an account title to record application of overhead Manufacturing OverheadOverhead Budget VarianceOverhead Volume VarianceCash, Accounts PayableWork in Process InventoryMaterials Quantity Variance

enter a debit amount

enter a credit amount

(To record application of overhead.)

(b)

Prepare the adjusting entry for the overhead variances. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title