Question

Selected cost data for European Poster, Co. are as follows: : (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the predetermined overhead allocation rate per direct labor dollar. Predetermined overhead allocation rate Requirement 2. Prepare the journal entry to allocate overhead cost for the year. (Record debits first, then credits. Exclude explanations from journal entries.) Date Accounts Debit Credit Dec. 31 Requirement 3. Use a T-account to determine the amount of underallocated or overallocated manufacturing overhead. Start by posting the actual and allocated manufacturing overhead to the T-account. (Use the first available cell to post each amount. Do not input the balance in the T-account.) Manufacturing Overhead Manufacturing overhead is [ by $ D .

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer - Part 1) Estimated Manufacturing cost 120000 / - Predetermined overhead Estimated Direct Labor allocation rate 100000 120 (120000/100000*100) - Part 2) Date Dec. 31 Debit Credit 82800 Accounts Work in Process (69000*120%) Manufacturing Overheads (To allocate overheads cost for the year) 82800 n m 4 Part 3) Manufacturing Overheads 119000 n 82800 o 90 Manufacturing overheads are Underapplied 36200 Underapplied manufacturing overheads = $ 119000-82800 1 = $ 36200

3 Part 4) 4 Date 5 Dec. 31 Debit Credit 36200 Accounts Cost of goods sold Manufacturing Overheads (To close underapplied overheads) 36200 nm m in