Southern Rim Parts estimates its manufacturing overhead to be $282,000 and its direct labor costs to be $940,000 for year 1. The first three jobs that Southern Rim worked on had actual direct labor costs of $53,000 for Job 301, $78,000 for Job 302, and $115,000 for Job 303. For the year, actual manufacturing overhead was $459,000 and total direct labor cost was $846,000. 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 $28,410 Finished goods inventory $113,640 Cost of goods sold $331,450 Required: Prepare an entry to allocate the under-or overapplied overhead.
Southern Rim Parts estimates its manufacturing overhead to be $282,000 and its direct labor costs to be $940,000 for year 1. The first three jobs that Southern Rim worked on had actual direct labor costs of $53,000 for Job 301, $78,000 for Job 302, and $115,000 for Job 303. For the year, actual manufacturing overhead was $459,000 and total direct labor cost was $846,000. 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 $28,410 Finished goods inventory $113,640 Cost of goods sold $331,450 Required: Prepare an entry to allocate the under-or overapplied overhead.
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 $282,000 and its direct labor
costs to be $940,000 for year 1. The first three jobs that Southern Rim worked on had actual
direct labor costs of $53,000 for Job 301, $78,000 for Job 302, and $115,000 for Job 303. For
the year, actual manufacturing overhead was $459,000 and total direct labor cost was
$846,000. 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 $28,410
Finished goods inventory $113,640
Cost of goods sold
$331,450
Required:
Prepare an entry to allocate the under-or overapplied overhead.
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