Chapter 19, Problem P19.40CT

Using Excel to calculate a predetermined overhead allocation rate, journalize and post manufacturing entries, and adjust for overallocated or underallocated overhead
Download an Excel template for this problem online in MyAccountingLab or athttp://www.pearsonhighered.com/Horngren.
Cedar River Trikes manufactures three-wheeled bikes for adults The company allocates manufacturing overhead costs based on machine hours Cedar River expects to incur $250,000 of manufacturing overhead costs, and to use 10,000 machine hours during fiscal year 2018. Cedar River reported the following inventory balances at May 31,2018:

Raw Materials Inventory	$ 25,000
Work-in-Process Inventory	18,000
Finished Goods Inventory	43,000

During June 2018, Cedar River actually used 1,100 machine hours.

Requirements

1. Compute the predetermined overhead allocation rate for fiscal year 2018. Use the blue shaded areas for inputs.
2. Use Excel to journalize the transactions in the general journal. The account titles are available when you click the down-arrow. Use the Increase Indent button on the Home tab to indent items.
3. Enter the beginning balances for the inventories. Assume the rest of the accounts do not have beginning balances. Post the transactions to T-accounts. The balances in the T-accounts are automatically updated.
4. Adjust the manufacturing overhead.
1. Prepare the journal entry.
2. Post to T-accounts.
5. List the ending balances for Raw Materials Inventory, Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.