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the following actual overhead costs for the month of June. Indirect materials $20,000 Indirect labor $18,000...

the following actual overhead costs for the month of June. Indirect materials $20,000 Indirect labor $18,000 Rent $ 3,000 Equipment depreciation $ 6,500 Overhead is applied based on a predetermined rate of $12 per machine hour, and 5,100 machine hours were used during June. Required: a. Prepare a journal entry to record actual overhead costs for June. Assume that labor costs will be paid next month and that rent was prepaid. b. Prepare a journal entry to record manufacturing overhead applied to jobs during June. c. Create a T-account for manufacturing overhead, post the appropriate information from parts a and b to this account, and calculate the ending balance. d. Is manufacturing overhead overapplied or underapplied? Using the balance in the manufacturing overhead account calculated in part c, prepare the journal entry to close manufacturing overhead to cost of goods sold.

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Expert Solution

a Actual overhead cost for June
1 Indirect material Dr 20000
Indirect Labour Dr 18000
Rent Dr 3000
Depreciation Dr 6500
Manufacturing Account Cr 20000
Provision for Indirect labour Cr 18000
Equipment Account Cr 6500
Prepaid Rent Account Cr 3000
(being Direct, prepaid and provision entries passed)
2 Provision for Indirect labour Dr 18000
Equipment Account Dr 6500
Prepaid Rent Account Dr 3000
Manufacturing Account Cr 27500
(Being transferred to Manufacturing Account)
b Manufacturing Overhead Entry
Direct Labour charges Dr 61200
Manufacturing Overhead Accout Cr 61200 (5100x12)
(Being provison done for the payment of next month)
c Cost of goods sold Account Dr 108700
Manufacturing Overhead Account Cr 108700
(Being transferred to COGS Accounts)
Manufacturing Overhead Account
Debtors $ Creditors $
Indirect material 20000 Cost of goods sold 108700
Provision for Indirect labour 18000
Equipment Account 6500
Prepaid Rent Account 3000
Direct Labour charges 61200
108700 108700

ekkarill92 answered 1 year ago
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