Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for

2018

follow:

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(Click the icon to view the cost data.)Read the requirements

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.

Requirement 1. Compute the predetermined overhead allocation rate. Round to two decimal places.

				Predetermined overhead
			=	allocation rate
			=		per machine hour

Requirement 2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account. (Enter the ending balance on the last line.)

Manufacturing Overhead

Requirement 3. Prepare the journal entry to adjust for underallocated or overallocated overhead. (Record debits first, then credits. Exclude explanations from any journal entries.)

Date			Accounts	Debit	Credit
Dec. 31

Requirement 4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don't accountants just use the actual manufacturing overhead rate?

The actual manufacturing overhead rate is

. Managers need to make decisions

. Accountants use predetermined overhead allocation rates to give managers product cost information when they need it

.

DATA TABLE

	Estimated	Actual
Machine hours	24,500 hours	32,500 hours
Maintenance labor (repairs to equipment)	$19,000	$21,500
Plant supervisor's salary	41,000	46,000
Screws, nails, and glue	21,000	44,000
Plant utilities	42,000	95,850
Freight out	39,000	44,500
Depreciation on plant and equipment	83,800	82,000
Advertising expense	45,000	57,000