Superior 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 2014 follow:

Requirements

1. Compute the predetermined overhead allocation rate.

2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.

3. Prepare the journal entry to adjust for underallocated or overallocated overhead.

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

Transcribed Image Text:

Estimated Actual Machine hours Maintenance labor (repairs to equipment) Plant supervisor's salary Screws, nails, and glue Plant utdities Freight out Depreciation on plant and equipment Advertising expense 28,000 hours 32,400 hours 16,000 S26,500 46,000 23,000 42,000 35,000 83,000 46,000 47,000 46,000 93,850 47,500 82,000 59,000