Chapter 19, Problem E19.20E

To determine

Concept Introduction:

Overhead Cost : Overhead cost is indirect cost. These are the cost which is not directly attributable to the job but essential for manufaturing a commodity.

T Account: A T-account is the graphical representation of a general ledger that records business transactions. T Account looks like the letter T, where Debit entries are recorded at the left side and credit entries recorded at right side and account title will be at the top.

Journal Entry: Journal entries are accounting entries made in a chronological order in the general ledger to record business transactions. Journal entry are logged with the debit amounts and credit amounts, with their respective dates and account names.

Requirement1:

To Determine

1. Pre-determined Overhead allocation rate of Metal Foundry.

To determine

Requirement 2

To Prepare

1. Journal Entry to allocate manufacturing overhead cost for the year

To determine

Requirement 3

To Prepare and Determine:

1. Manufacturing Overhead Account and Amount of Over Allocated or Under Allocated manufacturing overhead

To determine

Requirement 4

To Prepare and Determine

1. Journal Entry to adjust the under allocated or over allocated manufacturing overhead and it increases or decreases the cost of goods sold