Concept explainers
Accounting for manufacturing
Budgeted |
$4,140,000 |
Budgeted direct labor-hours | 180,000 |
Actual manufacturing overhead costs | $4,337,000 |
Actual direct labor-hours | 189,000 |
- 1. Compute the budgeted manufacturing overhead rate.
Required
- 2. Prepare the summary
journal entry to record the allocation of manufacturing overhead. - 3. Compute the amount of under- or overallocated manufacturing overhead. Is the amount significant enough to warrant proration of overhead costs, or should Creative Woodworking write it off to cost of goods sold? Prepare the journal entry to dispose of the under- or overallocated overhead.
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