White 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 overheadrate?

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Estimated Actual Machine hours Maintenance labor (repairs to equipment Plant supervisor's salary screws, nails, and glue Plant utilities Freight out Depreciation on plant and equipment Advertising expense 25,000 hours 32,100 hours 12,000 $ 28,500 47,000 24,000 41,000 37,000 87,000 43,000 48,000 45,000 96,850 46,500 83,000 54,000