In: Accounting
Happy Clicks Inc. uses a predetermined overhead allocation rate of $4.75 per machine hour. Actual overhead costs incurred during the year are as follows:
Indirect materials |
$5,200 |
Indirect labor |
$3,750 |
Plant depreciation |
$4,800 |
Plant utilities and insurance |
$9,530 |
Other plant overhead costs |
$12,700 |
Total machine hours used during the year |
7,520 hours |
What is the amount of manufacturing overhead cost allocated to Work-in-Process Inventory during the year?
Is the manufacturing overhead account under or over allocated and if so by how much?
Journalize the under or over allocation.
Ans 1 | ||
Amount of manufacturing overhead cost allocated to Work-in-Process Inventory during the year | ||
7520*4.75 | ||
35720 | ||
Ans 2 | ||
Indirect materials | 5200 | |
Indirect labor | 3750 | |
Plant depreciation | 4800 | |
Plant utilities and insurance | 9530 | |
Other plant overhead costs | 12700 | |
Actual overhead | 35980 | |
Overhead allocated | 35720 | |
Under allocated overhead | 260 | |
Ans 3 | ||
Under applied overhead journal entry | ||
Debit | Credit | |
Cost of goods sold | 260 | |
Factory overhead | 260 | |
( To transfer under applied overheads) |
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