Proration of Overhead: Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost. To compute: The overhead allocation rate. Given information: Budgeted direct labor cost is $225,000. Budgeted overhead cost is $315,000.

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Answer 1

Question

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

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Answer 2

Question

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

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Answer 3

Question

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

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Answer 4

Question

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

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Answer 5

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

Answer 6

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

Answer 7

Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

Answer 8

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

Answer 9

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

Answer 10

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

Answer 11

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

Answer 12

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

Answer 13

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

Answer 14

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

Answer 15

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

Answer 16

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

Answer 17

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

Answer 18

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Answer 19

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Answer 20

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Answer 21

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To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

To compute: The amount of under or over allocated manufacturing overhead.

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

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Chapter 4 Solutions