2) Weldin Inc. has provided the following data for the month of October. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work in process Finished goods Cost of goods sold Total Direct material 2550 15130 82620 100300 Direct labor 800 13350 72900 87050 Manufacturing overhead applied 1320 6600 36080 44000 Total 4670 35080 191600 231350 Manufacturing overhead incurred for the month was $47,000. Required: a. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. Provide the journal entry that would record the allocation of underapplied or overapplied among work in process, finished goods, and cost of goods sold. b. provide the journal entry if the company wants to close out underapplied or overapplied overhead to cost of goods sold. c. How much higher or lower will be net operating income if the company directly close out underapplied or overapplied overhead to cost of goods sold instead of using allocation process?

2) Weldin Inc. has provided the following data for the month of October. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work in process Finished goods Cost of goods sold Total Direct material 2550 15130 82620 100300 Direct labor 800 13350 72900 87050 Manufacturing overhead applied 1320 6600 36080 44000 Total 4670 35080 191600 231350 Manufacturing overhead incurred for the month was $47,000. Required: a. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. Provide the journal entry that would record the allocation of underapplied or overapplied among work in process, finished goods, and cost of goods sold. b. provide the journal entry if the company wants to close out underapplied or overapplied overhead to cost of goods sold. c. How much higher or lower will be net operating income if the company directly close out underapplied or overapplied overhead to cost of goods sold instead of using allocation process?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

2) Weldin Inc. has provided the following data for the month of October. There were no beginning inventories;
consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the
current month.
Work in process Finished goods Cost of goods sold
Total
Direct material
2550
15130
82620
100300
Direct labor
800
13350
72900
87050
Manufacturing overhead applied
1320
6600
36080
44000
Total
4670
35080
191600
231350
Manufacturing overhead incurred for the month was $47,000.
Required:
a. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost
of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
Provide the journal entry that would record the allocation of underapplied or overapplied among work in process,
finished goods, and cost of goods sold.
b. provide the journal entry if the company wants to close out underapplied or overapplied overhead to cost of goods
sold.
c. How much higher or lower will be net operating income if the company directly close out underapplied or
overapplied overhead to cost of goods sold instead of using allocation process?

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