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Business Accounting MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<

Under applied and Over applied: Actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied. At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied. To determine: Whether manufacturing overhead cost is over applied or under applied. Solution: Computation of the predetermined overhead rate Particulars Amount Estimated manufacturing overhead cost $100,000 Estimated total amount of the allocation base 50,000 Machine hours Predetermined over head rate $2 Per machine hour Computation of under applied or over applied of Manufacturing overhead cost Particulars Amount Actual manufacturing overhead cost $90,000 Manufacturing overhead cost applied to work: Predetermined over rate $ 2 Per machine hour Actual total amount of allocation base 40,000 Machine hours Manufacturing over head applied $80,000 Under applied manufacturing over head $10,000 Formula: P r e d e t e r m i n e d o v e r r a t e = E s t i m a t e d m a n u f a c t u r i n g o v e r h e a d c o s t / E s t i m a t e d t o t a l a m o u n t o f t h e a l l o c a t i o n b a s e . U n d e r a p p l i e d f o r m u l a = A c t u a l m a n u f a c t u r i n g o v e r h e a d i s g r e a t e r t h a n e s t i m a t e d m a n u f a c t u r i n g o v e r h e a d a p p l i e d . Explanations: P r e d e t e r m i n e d o v e r r a t e = $ 100 , 000 / 50 , 000 h o u r s = $ 2 A c t u a l a l l o c a t i o n b a s e f o r a p p l i e d = 40 , 000 * $ 2 = $ 80 , 000 A c t u a l m a n u f a c t u r i n g o v e r h e a d c o s t s = $ 90 , 000 S o , a c t u a l m a n u f a c t u r i n g o v e r h e a d i s e x c e e d e d t h e a p p l i e d m a n u f a c t u r i n g o v e r h e a d m a d e u n d e r a p p l i e d b y $ 10 , 000. ( $ 90 , 000 − $ 80 , 000 = $ 10 , 000 ) Conclusion: Above calculations and explanations stated company has under applied the manufactured over head.

Under applied and Over applied: Actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied. At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied. To determine: Whether manufacturing overhead cost is over applied or under applied. Solution: Computation of the predetermined overhead rate Particulars Amount Estimated manufacturing overhead cost $100,000 Estimated total amount of the allocation base 50,000 Machine hours Predetermined over head rate $2 Per machine hour Computation of under applied or over applied of Manufacturing overhead cost Particulars Amount Actual manufacturing overhead cost $90,000 Manufacturing overhead cost applied to work: Predetermined over rate $ 2 Per machine hour Actual total amount of allocation base 40,000 Machine hours Manufacturing over head applied $80,000 Under applied manufacturing over head $10,000 Formula: P r e d e t e r m i n e d o v e r r a t e = E s t i m a t e d m a n u f a c t u r i n g o v e r h e a d c o s t / E s t i m a t e d t o t a l a m o u n t o f t h e a l l o c a t i o n b a s e . U n d e r a p p l i e d f o r m u l a = A c t u a l m a n u f a c t u r i n g o v e r h e a d i s g r e a t e r t h a n e s t i m a t e d m a n u f a c t u r i n g o v e r h e a d a p p l i e d . Explanations: P r e d e t e r m i n e d o v e r r a t e = $ 100 , 000 / 50 , 000 h o u r s = $ 2 A c t u a l a l l o c a t i o n b a s e f o r a p p l i e d = 40 , 000 * $ 2 = $ 80 , 000 A c t u a l m a n u f a c t u r i n g o v e r h e a d c o s t s = $ 90 , 000 S o , a c t u a l m a n u f a c t u r i n g o v e r h e a d i s e x c e e d e d t h e a p p l i e d m a n u f a c t u r i n g o v e r h e a d m a d e u n d e r a p p l i e d b y $ 10 , 000. ( $ 90 , 000 − $ 80 , 000 = $ 10 , 000 ) Conclusion: Above calculations and explanations stated company has under applied the manufactured over head.

MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<

MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<

17th Edition

ISBN: 9781266862434

Author: Garrison

Publisher: MCG CUSTOM

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MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<

Ch. 3.A - EXERCISE 3A-1 Transaction Analysis LO3-5 Carmen...Ch. 3.A - EXERCISE 3A-2 Transaction Analysis LO3-5 Adams...Ch. 3.A - EXERCISE 3A-3 Transaction Analysis LO3-5 Dixon...Ch. 3.A - PROBLEM 3A-4 Transaction Analysis LO3-5 Morrison...Ch. 3.A - PROBLEM 3A-5 Transaction Analysis LO3-5 Star...Ch. 3.A - PROBLEM 3A-6 Transaction Analysis LO3-5 Brooks...Ch. 3 - Prob. 1Q Ch. 3 - Prob. 2Q Ch. 3 - What is underapplied overhead Overapplied...Ch. 3 - 3-4 Provide two reasons why overhead might be...

Ch. 3 - Prob. 5Q Ch. 3 - How do you compute the raw materials used in...Ch. 3 - Prob. 7Q Ch. 3 - How do you compute the cost of goods manufactured?Ch. 3 - Prob. 9Q Ch. 3 - Prob. 10Q Ch. 3 - Prob. 1AE Ch. 3 - Prob. 2AE Ch. 3 - Prob. 3AE Ch. 3 - Prob. 4AE Ch. 3 - Prob. 1F15 Ch. 3 - Prob. 2F15 Ch. 3 - Bunnell Corporation is a manufacturer that uses...Ch. 3 - Prob. 4F15 Ch. 3 - Prob. 5F15 Ch. 3 - Bunnell Corporation is a manufacturer that uses...Ch. 3 - Prob. 7F15 Ch. 3 - Prob. 8F15 Ch. 3 - Prob. 9F15 Ch. 3 - Prob. 10F15 Ch. 3 - Bunnell Corporation is a manufacturer that uses...Ch. 3 - Prob. 12F15 Ch. 3 - Prob. 13F15 Ch. 3 - Prob. 14F15 Ch. 3 - Prob. 15F15 Ch. 3 - EXERCISE 3-1 Prepare Journal Entries LO3-1 Lamed...Ch. 3 - Prob. 2E Ch. 3 - EXERCISE 3-3 Schedules of Cost of Goods...Ch. 3 - EXERCISE 3-4 Underapplied and Overapplied Overhead...Ch. 3 - Prob. 5E Ch. 3 - EXERCISE 3-6 Schedules of Cost of Goods...Ch. 3 - ( $ 15,000...Ch. 3 - EXERCISE 3-8 Applying Overhead: Journal Entries;...Ch. 3 - Prob. 9E Ch. 3 - Prob. 10E Ch. 3 - PROBLEM 3-11: T-Account Analysis of Cost Flows...Ch. 3 - Prob. 12P Ch. 3 - PROBLEM 3-13 Schedules of Cost of Goods...Ch. 3 - Prob. 14P Ch. 3 - PROBLEM 3-15 Journal Entries; T-Accounts;...Ch. 3 - Prob. 16P Ch. 3 - Prob. 17P Ch. 3 - Prob. 18C

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