Question
The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual
The following information pertains to Trenton Glass Works for the year just ended.
Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Actual selling and administrative expenses: 434,000
| Actual manufacturing overhead: | |||
| Depreciation | $ | 230,000 | |
| Property taxes | 22,000 | ||
| Indirect labor | 82,000 | ||
| Supervisory salaries | 200,000 | ||
| Utilities | 58,000 | ||
| Insurance | 30,000 | ||
| Rental of space | 302,000 | ||
| Indirect material (see data below) | 78,000 | ||
| Indirect material: | |||
| Beginning inventory, January 1 | 49,000 | ||
| Purchases during the year | 93,000 | ||
| Ending inventory, December 31 | 64,000 | ||
|
| |||
Required:
1. Compute the firms predetermined overhead rate, which is based on direct-labor hours.
2. Calculate the overapplied or underapplied overhead for the year.
3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.
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Cornerstones Of Cost Management
Authors: Don R. Hansen, Maryanne M. Mowen
3rd Edition
9781305147102, 1285751787, 1305147103, 978-1285751788
