The Mystic Manufacturing Company's Factory Overhead T-account at the end of the fiscalyear shows Actual Overhead in the amount of $450,000 and Allocated Overhead in theamount of $480,000.REQUIRED: Which of the following is true in describing this Accounting scenario?A) Overhead is under-applied by $30,000 and the journal entry to close out MOH would requiredebiting Cost of Goods Sold (COGS)B) Overhead is under-applied by $30,000 and the journal entry to close out MOH would requirecrediting Cost of Goods Sold (COGS).C) Overhead is over-applied by $30,000 and the journal entry to close out MOH would requiredebiting Cost of Goods Sold (COGS).D) Overhead is over-applied by $30,000 and the journal entry to close out MOH would requirecrediting Cost of Goods Sold (COGS).

Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

The Mystic Manufacturing Company's Factory Overhead T-account at the end of the fiscal year shows Actual Overhead in the amount of $450,000 and Allocated Overhead in the amount of $480,000. REQUIRED: Which of the following is true in describing this Accounting scenario? A) Overhead is under-applied by $30,000 and the journal entry to close out MOH would reqir debiting Cost of Goods Sold (COGS) B) Overhead is under-applied by $30,000 and the journal entry to close out MOH would requir crediting Cost of Goods Sold (COGS). C) Overhead is over-applied by $30,000 and the journal entry to close out MOH would require debiting Cost of Goods Sold (COGS). D) Overhead is over-applied by $30,000 and the journal entry to close out MOH would require crediting Cost of Goods Sold (COGS).

The Mystic Manufacturing Company's Factory Overhead T-account at the end of the fiscal year shows Actual Overhead in the amount of $450,000 and Allocated Overhead in the amount of $480,000. REQUIRED: Which of the following is true in describing this Accounting scenario? A) Overhead is under-applied by $30,000 and the journal entry to close out MOH would reqir debiting Cost of Goods Sold (COGS) B) Overhead is under-applied by $30,000 and the journal entry to close out MOH would requir crediting Cost of Goods Sold (COGS). C) Overhead is over-applied by $30,000 and the journal entry to close out MOH would require debiting Cost of Goods Sold (COGS). D) Overhead is over-applied by $30,000 and the journal entry to close out MOH would require crediting Cost of Goods Sold (COGS).

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 15E: The books of Petry Products Co. revealed that the following general journal entry had been made at...

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Housley Paints Co. had a remaining debit balance of $25,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the underapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the debit balance in Under-and Overapplied Factory Overhead.
Coops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate on 24,286 direct labor hours. At the end of the year, actual overhead was $90,000 and the total direct labor hours were 24,100. What is the entry to dispose of the over applied or under applied overhead?
Nathan Industries had a remaining debit balance of $20,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is considered to be material.
Phillips Products, Inc. had a remaining credit balance of $10,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is considered to be material.
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Pocono Cement Forms expects $900,000 in overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 60,000 or its expected machine hours of 30,000. Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 90 direct labor hours, and 75 machine hours. Wages are paid at $16 per hour.
When setting its predetermined overhead application race, Tasty Box Meals estimated its overhead would be $100,000 and would require 25,000 machine hours in the next year. At the end of the year. It found that actual overhead was $102,000 and required 26,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under applied or over applied overhead.
The actual overhead for a company is $73,175. Overhead was based on 4,500 machine hours and was $3,325 over applied for the year. What is the overhead application rate per direct labor hour? What is the journal entry to dispose of the under applied overhead?
Queen Bees Honey, Inc., estimated its annual overhead to be $110,000 and based its predetermined overhead rate on 27,500 direct labor hours. At the end of the year, actual overhead was $106,000 and the total direct labor hours were 29,000. What is the entry to dispose of the over applied or under applied overhead?
When setting its predetermined overhead application rate. Tasty Turtle estimated its overhead would be $75,000 and manufacturing would require 25,000 machine hours in the next year. At the end of the year, it found that actual overhead was $74,000 and manufacturing required 24,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under- or over applied overhead.
The actual overhead for a company is $74,539. Overhead was based on 6,000 direct labor hours and was $2,539 under applied for the year. What is the overhead application rate per direct labor hour? What is the journal entry to dispose of the under applied overhead?
The books of Petry Products Co. revealed that the following general journal entry had been made at the end of the current accounting period: The total direct materials cost for the period was $40,000. The total direct labor cost, at an average rate of $10 per hour for direct labor, was one and one-half times the direct materials cost. Factory overhead was applied on the basis of $4 per direct labor hour. What was the total actual factory overhead incurred for the period? (Hint: First solve for direct labor cost and then for direct labor hours.)