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In: Accounting

Young's Manufacturing Plant uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based...

Young's Manufacturing Plant uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on machine hours required. At the beginning of 2018, the company expected to incur the following:

Manufacturing overhead costs

$840,000

Direct labor costs

$1,480,000

Machine hours

70,000 hours

At the end of 2018, the company actually incurred:

Direct labor costs

$1,230,000

Depreciation on manufacturing equipment

$620,000

Property taxes on plant

$35,500

Sales salaries

$26,000

Delivery drivers' wages

$22,500

Plant janitor's wages

$17,000

Machine hours

60,000 hours
  1. Compute Young's predetermined overhead allocation rate.
  2. Prepare the journal entry to allocate manufacturing overhead.
  3. Is manufacturing overhead underallocated or overallocated? By how much?
  4. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead.


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ekkarill92 answered 2 years ago
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