Selected cost data for

European Poster, Co.

are as follows:

1(Click

the icon to view the cost data.) Read the

requirements2.

Requirement 1. Compute the predetermined overhead allocation rate per direct labor dollar.

				Predetermined overhead
(1)		(2)	=	allocation rate
			=		%

Requirement 2 . Prepare the journal entry to allocate overhead costs for the year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Date			Accounts and Explanation	Debit	Credit
Dec. 31			(3)
			(4)
			(5)
			(6)
			(7)

1: Data Table

Estimated manufacturing overhead cost for the year	$115,000
Estimated direct labor cost for the year	71,875
Actual manufacturing overhead cost for the year	118,000
Actual direct labor cost for the year	69,000

2: Requirements

1.	Compute the predetermined overhead allocation rate per direct labor dollar.
2.	Prepare the journal entry to allocate overhead costs for the year.

(1)

Actual direct labor cost

Actual overhead cost

Estimated direct labor cost

Estimated overhead cost

(2)

Actual direct labor cost

Actual overhead cost

Estimated direct labor cost

Estimated overhead cost

(3)

Accounts Payable

Accounts Receivable

Cash

Cost of Goods Sold

Finished Goods Inventory

Manufacturing Overhead

Raw Materials Inventory

Work-in-Process Inventory

(4)

Accounts Payable

Accounts Receivable

Cash

Cost of Goods Sold

Finished Goods Inventory

Manufacturing Overhead

Raw Materials Inventory

Work-in-Process Inventory

(5)

Accounts Payable

Accounts Receivable

Cash

Cost of Goods Sold

Finished Goods Inventory

Manufacturing Overhead

Raw Materials Inventory

Work-in-Process Inventory

(6)

Accounts Payable

Accounts Receivable

Cash

Cost of Goods Sold

Finished Goods Inventory

Manufacturing Overhead

Raw Materials Inventory

Work-in-Process Inventory

(7)

Adjusted MOH for underallocated overhead.

Allocated overhead to WIP.

Completed jobs, costs assigned to FG.

Incurred labor, direct labor assigned to WIP, indirect labor accumulated in MOH.

Incurred overhead, costs accumulated in MOH.

Purchased materials, accumulated in RM.

Sold jobs, costs assigned to COGS.

Sold jobs on account.

Used materials, direct materials assigned to WIP, indirect materials accumulated in MOH.