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Luzadis Company | ||||
Workings | ||||
Calculation of Manufacturing overhead applied | ||||
Amount $ | Note | |||
Applied to Work in process | 73,840.00 | |||
Applied to Finished goods | 147,680.00 | |||
Applied to Cost of good sold | 701,480.00 | |||
Manufacturing overhead applied | 923,000.00 | A | ||
Answer 1 | ||||
Calculation of under applied/ over applied overhead | Amount $ | |||
Manufacturing overhead amount applied | 923,000.00 | See A | ||
Manufacturing overhead cost | 990,000.00 | B | ||
Under applied | 67,000.00 | C=B-A | ||
Answer 2 | ||||
If overhead variance is closed through cost of good sold. | ||||
Journal Entry | ||||
Account | Debit $ | Credit $ | ||
Cost of Goods Sold | 67,000.00 | See C | ||
Manufacturing overhead | 67,000.00 | |||
Answer 3 | ||||
If overhead variance closed in the ratio of work in process, finished goods and cost of good sold. | ||||
Work in process | Finished goods | Cost of good sold | Total | |
Amount | 156,000.00 | 312,000.00 | 1,482,000.00 | 1,950,000.00 |
% of allocation | 8.00% | 16.00% | 76.00% | 100.00% |
Over applied overhead | 5,360.00 | 10,720.00 | 50,920.00 | 67,000.00 |
Journal Entry | ||||
Account | Debit $ | Credit $ | ||
Work in process | 5,360.00 | |||
Finished goods | 10,720.00 | |||
Cost of good sold | 50,920.00 | |||
Factory overhead | 67,000.00 | |||
Answer 4 | ||||
Under applied overhead allocated to | Amount $ | |||
Work in process | 5,360.00 | |||
Finished goods | 10,720.00 | |||
Total | 16,080.00 | |||
Income will be higher by $ 16,080 if under applied overhead in allocated to work in process, finished goods and cost of good sold rather than being closed to Cost of Goods Sold. |
4 answers reguired Luzadis Company makes furniture using the latest automated technology. The company uses a...
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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $765,000 of total manufacturing overhead for an estimated activity level of 85,000 machine-hours During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's...
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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,520,000 of total manufacturing overhead for an estimated activity level of 76,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buldup of furniture in the company's warehouse. The company's...
Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1.615,000 of total manufacturing overhead for an estimated activity level of 85,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's...
Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine hours. The predetermined overhead rate was based on a cost formula that estimates $1,615,000 of total manufacturing overhead for an estimated activity level of 85,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The...