Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,000 Estimated direct labor hours 10,000 hours...

Estimated manufacturing overhead $ 500,000

Actual manufacturing overhead $ 550,000

Estimated direct labor hours 10,000 hours

Actual direct labor hours 10,500

13.	Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base.
14.	Determine the amount of overhead allocated during the year. Record the journal entry.
15.	Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing Overhead.

Expert Solution

13	Calculation of predetermined overhead allocation rate
	Estimated manufacturing overhead (A)	$ 500,000.00
	Estimated direct labor hours (B)	10,000.00
	predetermined overhead allocation rate ( C)=(A)/(B)	$ 50.00


14	Calculation of the amount of overhead allocated during the year.
	Actual direct labor hours (A)	10,500.00
	predetermined overhead allocation rate (B)	$ 50.00
	The amount of overhead allocated during the year ( C)=(A)*(B)	$ 525,000.00

	Journal Entry
		Debit	Credit
	Work-in-Process Inventory	$ 525,000.00
	Manufacturing Overhead		$ 525,000.00
	To Record to allocate overhead cost for the year.

15	Calculation of amount of underallocated or overallocated overhead
	Underallocated overhead=$550,000-$525,000	$ 25,000.00

	Journal Entry
		Debit	Credit
	Cost of Goods Sold	$ 25,000.00
	Manufacturing Overhead		$ 25,000.00

ekkarill92 answered 2 years ago

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