Required: Prepare an entry to prorate the under- or overapplied overhead assuming the company uses both Applied Manufacturing Overhead and Manufacturing Overhead Control accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Required: Prepare an entry to prorate the under- or overapplied overhead assuming the company uses both Applied Manufacturing Overhead and Manufacturing Overhead Control accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Southern Rim Parts estimates its manufacturing overhead to be $432,000 and its direct labor costs to be $1.080,000 for year 1. The
first three jobs that Southern Rim worked on had actual direct labor costs of $67,000 for Job 301, $92,000 for Job 302, and $185,000
for Job 303. For the year, actual manufacturing overhead was $389,000 and total direct labor cost was $832,000. Manufacturing
overhead is applied to jobs on the basis of direct labor costs using predetermined rates.
Overhead applied in each of the inventory accounts is as follows:
Work-in-process inventory
Finished goods inventory
Cost of goods sold
33,280
116,480
183,040
Required:
Prepare an entry to prorate the under- or overapplied overhead assuming the company uses both Applied Manufacturing Overhead
and Manufacturing Overhead Control accounts. (If no entry is required for a transaction/event, select "No journal entry required" in
the first account field.)
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