Question

Required information [The following information applies to the questions displayed below.) Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to work-in-process on the basis of machine hours. On January 1 of the current year, there were no balances in work-in-process or finished-goods Inventories. The following estimates were included in the current year's budget. Total budgeted manufacturing overhead Total budgeted machine hours $ 235,000 47,000 During January, the firm began the following production Jobs: A79: 1,000 machine hours NO8: 2,500 machine hours P82: 500 machine hours During January, Job numbers A79 and NOB were completed, and job number A79 was sold. The actual manufacturing overhead incurred during January was $26,000. 4. Prepare a journal entry to close the balance calculated in requirement (3) into Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list

Answer 1

solution :- .D Calculation of overapplied or under applied overhead for January Applied Manufacturing overhead Actual Manufacturing overhead : 1. Under applied Manufacturing overhead $ 20,000 $26,000 $ 6,000 2) Journal Entry under applied manufacturing overhead would have a debit balance. The entry to close this to cost of Goods sold would be transaction eredit($) General Journal .. Debit (6) cost of Goods sola $6,000 Manufacturing overhead . . $6,000

Explanation's Applied Manufacturing overhead = actual Machine Hoursy predetermined overhead rate : - 41000 4 $5 =$20,000 predetermined overhead Rete = Budgeted Manufacturing overhead Budgeted Machine Hours = $235,000 47,000 $5 per machine hour

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