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. 2B. 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. Reg 1 Req 2A Req 2B 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 Debit Credit Debit Credit (Maintenance) 30,000 (a) (Direct materials) 800,000 99,000 (Indirect materials) 8,900 (Direct labor) (Overhead) (a) (Indirect labor) 80,000 (Utilities) 43,000 (Insurance) 7,900 (Depreciation) 70,000 Balance < Req 1 Req 2A >
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. 2B. 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. Reg 1 Req 2A Req 2B 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 Debit Credit Debit Credit (Maintenance) 30,000 (a) (Direct materials) 800,000 99,000 (Indirect materials) 8,900 (Direct labor) (Overhead) (a) (Indirect labor) 80,000 (Utilities) 43,000 (Insurance) 7,900 (Depreciation) 70,000 Balance < Req 1 Req 2A >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
2B. 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 2B
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
Debit
Credit
Debit
Credit
(Maintenance)
30,000
(a)
(Direct materials)
800,000
99,000
(Indirect materials)
8,900
(Direct labor)
(Indirect labor)
80,000
(Overhead) (a)
(Utilities)
43,000
(Insurance)
7,900
(Depreciation)
70,000
Balance
< Req 1
Req 2A >
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