LO.2 (Predetermined OH rates and underapplied/overapplied OH) Davidson's Dolls had the following information in its Work in Process Inventory account for June 2010: Work in Process Inventory Beginning balance 10,000 Transferred out 335,000 Materials added 150,000 Labor (5,000 DLHS) 90,000 Applied overhead 120,000 Ending balance 35,000 All workers are paid the same rate per hour. Factory overhead is applied to Work in Process Inventory on the basis of direct labor hours. The only work left in process at the end of the month had a total of 2,860 direct labor hours accumulated to date. a. What is the total predetermined OH rate per direct labor hour? b. If actual total overhead for June is $121,500, what is the amount of underapplied or overapplied overhead? c. Given your answer to part (b), how would you recommend the over- or underap- plied overhead be closed?

LO.2 (Predetermined OH rates and underapplied/overapplied OH) Davidson's Dolls had the following information in its Work in Process Inventory account for June 2010: Work in Process Inventory Beginning balance 10,000 Transferred out 335,000 Materials added 150,000 Labor (5,000 DLHS) 90,000 Applied overhead 120,000 Ending balance 35,000 All workers are paid the same rate per hour. Factory overhead is applied to Work in Process Inventory on the basis of direct labor hours. The only work left in process at the end of the month had a total of 2,860 direct labor hours accumulated to date. a. What is the total predetermined OH rate per direct labor hour? b. If actual total overhead for June is $121,500, what is the amount of underapplied or overapplied overhead? c. Given your answer to part (b), how would you recommend the over- or underap- plied overhead be closed?

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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