In: Accounting
At the beginning of 2012, upper-level management met and determined that the budgeted amount of MOH for the upcoming year was $1,629,000. They also estimated that the total number of direct labor hours that will be needed this year would be 123,000 hours. The following data relates to activities that occurred in the month of May:
journal entry only
Journal Entries | ||||||
Events | Particulars | Debit | Credit | |||
1) | Work in Process | (11000 x 80% x $ 15) | $ 132,000 | |||
Manu. OH | (11000 x 15% x $ 15) | $ 24,750 | ||||
Salaries Expense | (11000 x 5% x $ 22) | $ 12,100 | ||||
To Factory Payroll | $ 168,850 | |||||
2) | Work in Process | $ 116,546 | ||||
To Manu. OH | $ 116,546 | |||||
(Workings) |
Workings: | |||||
Predetermined OH rate | = | Budgeted Manu. Oh / Budgeted Direct Labor Hours | |||
= | $ 1629000 / 123000 | ||||
= | $ 13.24 | per DLH | |||
Actual Direct Labor Hours | = | 11000 x 80% | |||
= | 8800 | ||||
MOH applied | = | $ 13.24 x 8800 | |||
= | $ 116,546 |