Machine-hours Manufacturing overhead cost Inventories at year-end: Raw materials Work in process (includes overhead applied of $71,100) Finished goods (includes overhead applied of $134,300) Cost of goods sold (includes overhead applied of $584,600) Required: 1. Compute the underapplied or overapplied overhead. 79,000 $ 836,000 $ 15,000 $ 171,900 $ 324,700 $ 1,413,400 2. Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume the company allocates underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cos of Goods Sold Prepare the appropriate journal entry
Machine-hours Manufacturing overhead cost Inventories at year-end: Raw materials Work in process (includes overhead applied of $71,100) Finished goods (includes overhead applied of $134,300) Cost of goods sold (includes overhead applied of $584,600) Required: 1. Compute the underapplied or overapplied overhead. 79,000 $ 836,000 $ 15,000 $ 171,900 $ 324,700 $ 1,413,400 2. Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume the company allocates underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cos of Goods Sold Prepare the appropriate journal entry
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Machine-hours
Manufacturing overhead cost
Inventories at year-end:
Raw materials
Work in process (includes overhead applied of $71,100)
Finished goods (includes overhead applied of $134,300)
Cost of goods sold (includes overhead applied of $584,600)
Required:
1. Compute the underapplied or overapplied overhead.
79,000
$ 836,000
$ 15,000
$ 171,900
$ 324,700
$ 1,413,400
2. Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry.
3. Assume the company allocates underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost
of Goods Sold. Prepare the appropriate journal entry.
4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in
Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?
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Compute the underapplied or overapplied overhead.
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