Superior Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Superior Uniforms reports the following cost data for the past year:
Budget Actual Direct labor hours. ..... Machine hours ....... .............. ............ ...... 7,000 hours 7,000 hours $ 23,000 $ 49,000 6,000 hours 6,300 hours $ 23,000 Depreciation on salespeople's autos Indirect materials ............................ $ 50,500 Depreciation on trucks used to deliver uniforms to customers Depreciation on plant and equipment ........... Indirect manufacturing labor. ............ $ 13,500 $ 64,000 $ 43,500 $ 21,500 $ 46,500 $ 12,000 $ 66,000 $ 46,500 $ 23,000 $ 47,500 Customer service hotline .... Plant utilities. .... Direct labor cost. ............ $ 72,500 $ 85,500 Requirements det de 1. Compute the predetermined manufacturing overhead rate. 2. Calculate the allocated manufacturing overhead for the past year. Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposed ca of? 4. How can managers use accounting information to help control manufacturing overhead costs? Print Done ere Superior Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Superior Uniforms reports the following cost data for the past year: (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the predetermined manufacturing overhead rate. Enter the formula for predetermined manufacturing overhead rate, then compute the rate. Estimated yearly overhead costs / Estimated yearly machine hours = Predetermined overhead rate per machine hour 203,000 Requirement 2. Calculate the allocated manufacturing overhead for the past year. Manufacturing overhead allocated Actual machine hours x Predetermined overhead rate = Requirement 3. Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposed of? Requirement 3. Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposed of? First calculate the preliminary manufacturing overhead balance using the T-account. Manufacturing Overhead Close the under- or overallocated overhead to Cost of Goods Sold by journalizing the entry. (Record debits first, then credits. Exclude explanations from any journal entries.) Close the under-or overallocated overhead to Cost of Goods Sold by journalizing the entry. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Accounts Debit Credit Requirement 4. How can managers use accounting information to help control manufacturing overhead costs? with the budgeted amounts. Managers will also To help control manufacturing overhead, managers compare the actual line item amounts for investigate only differences between actual and budgeted amounts to identify the reasons why actual costs
