Question

Please help with the following problem.

Yarra Fabrication estimates that its manufacturing overhead will be $2,348,800 in year 1. It further estimates that direct material costs will amount to $1,468,000. Actual manufacturing overhead costs for the year were $2,485,000. Actual direct materials costs were $1,635.000. Manufacturing overhead is applied to jobs based direct materials cost using predetermined rates. Overhead applied in each of the inventory accounts is as follows. Work-in-process inventory Finished goods inventory Cost of goods sold $ 497,750 $1,176,500 $7,375,750 Required: Prepare an entry to allocate the over- or underapplied overhead. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list View journal entry worksheet No Transaction Debit Credit General Journal Applied manufacturing overhead Work-in-process inventory Finished goods inventory Cost of goods sold

Answer 1

Solution: No Credit Debit 131000 А Transaction General Journal 1 Applied manufacturing overhead Work in process inventory Finished goods inventory cost of goods sold (refer Note 1) 7205 17030 106765

Note 1: Overhead rate=Estimated MOH/Estimated Direct material cost 2348800/1468000 160.00% of direct material cost Actual overhead Overhead applied=1635000*160% Overapplied overhead 2485000 2616000 131000 Work in process inventory Finished goods inventory cost of goods sold Overhead applied % of total b=a/9050000 497750 1176500 7375750 9050000 5.50% 13.00% 81.50% overapplied overhead Allocation d=b*c 131000 7205 13100017030 131000 106765 131000