Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours. Required: 1. Assume that during the year the company works only 84,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts.. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. 28. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. Manufacturing Overhead (Maintenance) (Indirect materials) (Indirect labor) 30,000 8.900 80,000 (a) (Direct materials) (Direct labor) (Overhead) (a) Work in Process 800,000 99,000
Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.80 per machine-hour was based on a cost formula that estimates $249,200 of total manufacturing overhead for an estimated activity level of 89,000 machine-hours. Required: 1. Assume that during the year the company works only 84,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts.. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. 28. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. Manufacturing Overhead (Maintenance) (Indirect materials) (Indirect labor) 30,000 8.900 80,000 (a) (Direct materials) (Direct labor) (Overhead) (a) Work in Process 800,000 99,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The
company's predetermined overhead rate of $2.80 per machine-hour was based on a cost formula that estimates $249,200 of
total manufacturing overhead for an estimated activity level of 89,000 machine-hours.
Required:
1. Assume that during the year the company works only 84,000 machine-hours and incurs the following costs in the
Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work
in Process for the year and make the entry in your T-accounts.
2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing
Overhead T-account.
28. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.
Complete this question by entering your answers in the tabs below.
Req 2A
Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts.
Manufacturing Overhead
Work in Process
800,000
99,000
Req 1
(Maintenance)
(Indirect materials)
(Indirect labor)
Req 28
30,000
8,900
80,000
(a)
(Direct materials)
(Direct labor)
(Overhead) (a)
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