eBook Print Item Question Content Area Predetermined Overhead Rate, Overhead Variances, Journal Entries Craig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig's production is machine intensive, overhead is applied on the basis of machine hours. The expected overhead for the year was $5,412,800, and the practical level of activity is 398,000 machine hours.    During the year, Craig used 404,000 machine hours and incurred actual overhead costs of $5,411,400. Craig also had the following balances of applied overhead in its accounts: Work-in-process inventory $ 621,090 Finished goods inventory   627,270 Cost of goods sold   1,841,640 Required: Question Content Area 1. Compute a predetermined overhead rate for Craig. Round your answer to the nearest cent. $fill in the blank 2be0d9002045031_1 per machine hour 2. Compute the overhead variance, and label it as under- or overapplied. $fill in the blank 2be0d9002045031_2       Question Content Area 3. Assuming the overhead variance is immaterial, prepare the journal entry to dispose of the variance at the end of the year. blank                 Question Content Area 4. Assuming the overhead variance is material, prepare the journal entry that appropriately disposes of the overhead variance at the end of the year. If an amount box does not require an entry, leave it blank. blank

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
eBook
Print Item

Question Content Area

Predetermined Overhead Rate, Overhead Variances, Journal Entries

Craig Company uses a predetermined overhead rate to assign overhead to jobs. Because Craig's production is machine intensive, overhead is applied on the basis of machine hours. The expected overhead for the year was $5,412,800, and the practical level of activity is 398,000 machine hours.

   During the year, Craig used 404,000 machine hours and incurred actual overhead costs of $5,411,400. Craig also had the following balances of applied overhead in its accounts:

Work-in-process inventory $ 621,090
Finished goods inventory   627,270
Cost of goods sold   1,841,640

Required:

Question Content Area

1. Compute a predetermined overhead rate for Craig. Round your answer to the nearest cent.

$fill in the blank 2be0d9002045031_1 per machine hour

2. Compute the overhead variance, and label it as under- or overapplied.
$fill in the blank 2be0d9002045031_2  

 
 

Question Content Area

3. Assuming the overhead variance is immaterial, prepare the journal entry to dispose of the variance at the end of the year.

blank
 
   
 
 
   
 

Question Content Area

4. Assuming the overhead variance is material, prepare the journal entry that appropriately disposes of the overhead variance at the end of the year. If an amount box does not require an entry, leave it blank.

blank
 
   
 
 
   
 
 
   
 
 
   
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 6 steps

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education