
Concept explainers
Treatment of Manufacturing
The Manufacturing overheads are indirect cost not directly identified and assigned to product or cost unit rather applied to these cost units on the basis of pre-determined basis. Therefore, there is almost every chance of difference between actual overheads incurred and overheads applied to production or cost unit.
For the treatment of manufacturing overheads, a separate manufacturing overheads account is maintained which is debited for the amount actually incurred while processing and credited for the amount applied on cost unit. The difference between the two amounts may be under-over applied overheads.
When the debit side of manufacturing account is more than the credit, there will be under applied overheads (as actual amount incurred is more than overheads applied) and when there is credit balance in account, it is over-applied overheads (as overheads applied is more than actual overheads).
Requirement1:
TheJournal entry for amount of overheads incurred and balance in the Manufacturing overheads account.

Trending nowThis is a popular solution!

Chapter 19 Solutions
Horngren's Accounting (11th Edition)
- TrendCo uses the straight-line method for depreciation. Assets purchased between the 1st and 15th of the month are depreciated for the entire month; assets purchased after the 15th are treated as though they were acquired the following month. On June 18, 20X3, TrendCo purchases a machine for $18,000 that it expects to last for 7 years; TrendCo expects the machine to have a residual value of $4,000. What is the 20X3 depreciation expense for the machine?arrow_forwardI need help with this General accounting question using the proper accounting approach.arrow_forwardI want to correct answer general accounting questionarrow_forward
- Bad Apple, Inc., uses direct labor hours to allocate overhead costs. If Bad Apple estimates $40,000 of overhead and 50,000 hours of direct labor this period, the overhead applied when 4,500 direct labor hours are used should be: a. $3,520 b. $3,600 c. $4,400 d. $5,500arrow_forwardProvide correct answer with accounting questionarrow_forwardCalculate the company's earnings sharesarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





