question archive Happy Clicks Inc
Happy Clicks Inc
Subject:BusinessPrice:3.87 Bought7
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.-
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| 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) |
