Sloan Manufacturing Corporation applies manufacturing overhead on the basis of 120% of direct labor cost. An analysis of the related accounts overhead incurred was $105,000 and that at year-end Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $1 current year.
Sloan Manufacturing Corporation applies manufacturing overhead on the basis of 120% of direct labor cost. An analysis of the related accounts overhead incurred was $105,000 and that at year-end Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $1 current year.
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Transcribed Image Text:Applied vs. Actual Manufacturing Overhead
Sloan Manufacturing Corporation applies manufacturing overhead on the basis of 120% of direct labor cost. An analysis of the related accounts and job order cost sheet indicates that during the year total manufacturing
overhead incurred was $105,000 and that at year-end Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $15,000, $10,000, and $75,000, respectively, of direct labor incurred during the
current year.
a. Determine the over-applied manufacturing overhead at year-end (assume it is significant).
Applied Manufacturing Overhead
Work in process $
Finished goods
Cost of goods sold
Total:
52,800
35,200
264,000
352,000
$
Over-applied manufacturing overhead $
b. Prepare a journal entry to record the disposition of the over-applied manufacturing overhead.
General Journal
Description
Manufacturing overhead ◆
Work in process inventory
Finished goods inventory
Cost of goods sold
◆
Debit
24,000
24,000
0
0
0
Credit
0
3,600
2,400
18,000
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