Question
Southern Rim Parts estimates its manufacturing overhead to be $432,000 and its direct labor costs to be $1,080,000 for year 1. The first three jobs
Southern Rim Parts estimates its manufacturing overhead to be $432,000 and its direct labor costs to be $1,080,000 for year 1. The first three jobs that Southern Rim worked on had actual direct labor costs of $67,000 for Job 301, $92,000 for Job 302, and $185,000 for Job 303. For the year, actual manufacturing overhead was $389,000 and total direct labor cost was $832,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates.
Overhead applied in each of the inventory accounts is as follows:
Work-in-process inventory | $ | 33,280 |
Finished goods inventory | 116,480 | |
Cost of goods sold | 183,040 | |
Required:
Prepare an entry to prorate the under- or overapplied overhead assuming the company uses both Applied Manufacturing Overhead and Manufacturing Overhead Control accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet Record the allocation of over- or underapplied overhead. Note: Enter debits before creditsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started