Thornton Company and Vernon Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year. Thornton Vernon Actual manufacturing overhead Actual direct labor hours Underapplied overhead Overapplied overhead Company $206,350 29,000 Company $248,350 23,000 19,500 $ 30,000 Required a. Compute the predetermined overhead rate for each company. b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each company, assuming the amounts are immaterial. Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined overhead rate for each company. (Round your answers to 2 decimal places.) Per Direct Labor Hour Thornton Company Vernon Company Predetermined overhead rate
Thornton Company and Vernon Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year. Thornton Vernon Actual manufacturing overhead Actual direct labor hours Underapplied overhead Overapplied overhead Company $206,350 29,000 Company $248,350 23,000 19,500 $ 30,000 Required a. Compute the predetermined overhead rate for each company. b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each company, assuming the amounts are immaterial. Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined overhead rate for each company. (Round your answers to 2 decimal places.) Per Direct Labor Hour Thornton Company Vernon Company Predetermined overhead rate
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required
a. Compute the predetermined overhead rate for each company.
b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each
company, assuming the amounts are immaterial.
Complete this question by entering your answers
the tabs below.
Required A
Required B
Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each
company, assuming the amounts are immaterial.
Adjusting Entry for Thornton Company:
Manufacturing Overhead
Cost of Goods Sold
Adjusting Entry for Vernon Company:
Manufacturing Overhead
Cost of Goods Sold
< Required A
Required B>
Transcribed Image Text:Thornton Company and Vernon Company both apply overhead to the Work in Process Inventory account using direct labor hours. The
following information is available for both companies for the year.
Thornton
Vernon
Actual manufacturing overhead
Actual direct labor hours
Underapplied overhead
Overapplied overhead
Company
$206,350
29,000
Company
$248,350
23,000
19,500
$ 30,000
Required
a. Compute the predetermined overhead rate for each company.
b. Using T-accounts, record the entry to close the overapplied or underapplied overhead at the end of the accounting period for each
company, assuming the amounts are immaterial.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the predetermined overhead rate for each company. (Round your answers to 2 decimal places.)
Per Direct Labor Hour
Thornton Company
Vernon Company
Predetermined overhead rate
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