Question

3. Eric Corporation bases its predetermined overhead rate on the estimated labor-hours for the year. Dute for the most recently completed year appear below: 25,000 59 per labor-hour $300,000 Estimates made at the beginning of the year Estimated Labor-hours Estimated variable manufacturing overhead Estimated to al fixed manufacturing overhead Actual labor-hours for the year: 24,500 (a) Compute the company's predetermined overhead rate for the year (5 points). (b) If total manufacturing overhead for the year was underapplied for $6,000, prepare a journal entry to close the balance in the Manufacturing Overhead account to Cost of Goods Sold. (2 points) Account Titles / Debit Credit (c) The job cost sheet for Job ABG12, which was started and completed during the year, showed the following: Materials requisitioned $1,000 Direct labor hours 100 Direct labor rate $12 per hour Compute the total product cost recorded for Job ABG12. Please note that you need to use predetermined overhead rate calculated in (a) (5 points).

Answer 1

Posturing al given, Estimated labour brb = 25,000 bis Estimated variable manufacturing ofh=$9/labour br =9x2500D $2,25,000 Estimated filed manufacturing o/= $3.00,000 Total Estimated Overhead's 22,25,000+300,000 ____=$5,25,000 tore=determined ofbrate - Total Estimated manufacturing_cast Estimated 10.04 machine brs = 5,25,000_- $21 flabour hour 25,000 edib159500 | Manufacturing overhead alu Pr_ 6,000 To cost of goods_soldate _ _6,000 L. Being total manufacturing overbead Lindertapplied c). TOTAL PRODUCT_COST.' material = $1,000 Labour = 100x 12 = $1,200 Tovgiheed rate is used avörhead = 100x21332_100_ from azaloved TOTAL = 4,300