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Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to operations for the year: Budgeted operating overhead 1996,480 Actual operating overhead $185.200 Budgeted net realizable value of recycled paper $22,080 Actual net realizable value of recycled paper $23,280 Budgeted bilable hours 168.000 170,160 Actual bible hours a. Assuming that number of billable hours is the allocation base, what was the company's predetermined overhead rate? $ 13.92 b. Record the journal entry for the sale of the recycled paper. Account Debit Credit Cash Manufacturing Overhead To record sale of by-product 23,280 0 23,280 c. What was the company's underapplied or overapplied overhead for the year? Note: Do not use a negative sign with your answer. $25,008 Overappled

Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to operations for the year: Budgeted operating overhead 1996,480 Actual operating overhead $185.200 Budgeted net realizable value of recycled paper $22,080 Actual net realizable value of recycled paper $23,280 Budgeted bilable hours 168.000 170,160 Actual bible hours a. Assuming that number of billable hours is the allocation base, what was the company's predetermined overhead rate? $ 13.92 b. Record the journal entry for the sale of the recycled paper. Account Debit Credit Cash Manufacturing Overhead To record sale of by-product 23,280 0 23,280 c. What was the company's underapplied or overapplied overhead for the year? Note: Do not use a negative sign with your answer. $25,008 Overappled

FINANCIAL ACCOUNTING
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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Accounting for scrap Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to operations for the year. Budgeted operating overhead Actual operating overhead Budgeted net realizable value of recycled paper Actual net realizable value of recycled paper Budgeted bilable hours Actual billable hours a. Assuming that number of billable hours is the allocation base, what was the company's predetermined overhead rate? $ 13.92 $996,480 $985,200 $22,080 $23,280 168,000 170,160 b. Record the journal entry for the sale of the recycled paper. Account Credit Debit 23,280 Cash Manufacturing Overhead ✔ To record sale of by-product 23,280 c. What was the company's underapplied or overapplied overhead for the year? Note: Do not use a negative sign with your answer. $25,008 Overappled
Transcribed Image Text:Accounting for scrap Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to operations for the year. Budgeted operating overhead Actual operating overhead Budgeted net realizable value of recycled paper Actual net realizable value of recycled paper Budgeted bilable hours Actual billable hours a. Assuming that number of billable hours is the allocation base, what was the company's predetermined overhead rate? $ 13.92 $996,480 $985,200 $22,080 $23,280 168,000 170,160 b. Record the journal entry for the sale of the recycled paper. Account Credit Debit 23,280 Cash Manufacturing Overhead ✔ To record sale of by-product 23,280 c. What was the company's underapplied or overapplied overhead for the year? Note: Do not use a negative sign with your answer. $25,008 Overappled
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