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The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 434,000 Actual manufacturing overhead: Depreciation Property taxes Indirect labor Supervisory salaries Utilities Insurance Rental of space Indirect material (see data below) Indirect material: Beginning inventory, January 1 Purchases during the year Ending inventory, December 31 $ 230,000 22,000 82,000 200,000 58,000 30,000 302,000 78,000 49,000 93,000 64,000 Required: 1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours. 2. Calculate the overapplied or underapplied overhead for the year. 3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.

The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 434,000 Actual manufacturing overhead: Depreciation Property taxes Indirect labor Supervisory salaries Utilities Insurance Rental of space Indirect material (see data below) Indirect material: Beginning inventory, January 1 Purchases during the year Ending inventory, December 31 $ 230,000 22,000 82,000 200,000 58,000 30,000 302,000 78,000 49,000 93,000 64,000 Required: 1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours. 2. Calculate the overapplied or underapplied overhead for the year. 3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.

FINANCIAL ACCOUNTING
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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The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 434,000 Actual manufacturing overhead: Depreciation Property taxes Indirect labor Supervisory salaries Utilities Insurance Rental of space Indirect material (see data below) Indirect material: Beginning inventory, January 1 Purchases during the year Ending inventory, December 31 $ 230,000 22,000 82,000 200,000 58,000 30,000 302,000 78,000 49,000 93,000 64,000 Required: 1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours. 2. Calculate the overapplied or underapplied overhead for the year. 3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.
Transcribed Image Text:The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 434,000 Actual manufacturing overhead: Depreciation Property taxes Indirect labor Supervisory salaries Utilities Insurance Rental of space Indirect material (see data below) Indirect material: Beginning inventory, January 1 Purchases during the year Ending inventory, December 31 $ 230,000 22,000 82,000 200,000 58,000 30,000 302,000 78,000 49,000 93,000 64,000 Required: 1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours. 2. Calculate the overapplied or underapplied overhead for the year. 3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.
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