Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs with actual direct labor costs of $35,000 for Job 0301, $22,500 for Job 0302, $32,000 for Job 0303, and $16,000 for Job 0304. Actual manufacturing overhead costs for the year were $1,710,000. Actual direct labor costs for the year were $735,000. Manufacturing overhead is applied to jobs based on direct labor costs using predetermined rates. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows: Work-in-process inventory Finished goods inventory Cost of goods sold Required: $ 33,810 $ 270,480 $ 1,386,210 Prepare an entry to allocate the over- or underapplied overhead. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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

Munabhai

Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will
amount to $750,000. During March, Linzee worked on four jobs with actual direct labor costs of $35,000 for Job 0301, $22,500 for
Job 0302, $32,000 for Job 0303, and $16,000 for Job 0304. Actual manufacturing overhead costs for the year were $1,710,000.
Actual direct labor costs for the year were $735,000. Manufacturing overhead is applied to jobs based on direct labor costs using
predetermined rates.
The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows:
Work-in-process inventory
Finished goods inventory
Cost of goods sold
Required:
5 33,810
$ 270,480
$ 1,386,210
Prepare an entry to allocate the over- or underapplied overhead.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
A
No
Transaction
1
Answer is not complete.
General Journal
Work-in-Process Inventory
Finished Goods Inventory
Cost of Goods Sold
Manufacturing Overhead Applied
Debit
Credit
390
3,120
15,990
19,500
Transcribed Image Text:Linzee Liners estimates that its manufacturing overhead will be $1,725,000 in Year 1. It further estimates that direct labor costs will amount to $750,000. During March, Linzee worked on four jobs with actual direct labor costs of $35,000 for Job 0301, $22,500 for Job 0302, $32,000 for Job 0303, and $16,000 for Job 0304. Actual manufacturing overhead costs for the year were $1,710,000. Actual direct labor costs for the year were $735,000. Manufacturing overhead is applied to jobs based on direct labor costs using predetermined rates. The amount of overhead applied in each of the inventory accounts at the end of Year 1 is as follows: Work-in-process inventory Finished goods inventory Cost of goods sold Required: 5 33,810 $ 270,480 $ 1,386,210 Prepare an entry to allocate the over- or underapplied overhead. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. A No Transaction 1 Answer is not complete. General Journal Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Manufacturing Overhead Applied Debit Credit 390 3,120 15,990 19,500
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps with 6 images

Blurred answer
Knowledge Booster
Costing Systems
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.
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