Question

Access Product Inc. Incurred the following actual overhead cost for the month of November

Indirect materials $ 40000

Indirect Labor     36000

Rent 6000

Equipment Depreciations 13000

Overhead is applied based on predetermined rate of $ 24 per machine hours, and 5100 machine hours were used during november.

Prepared journal entry record actual overhead cost for november. assume that labor costs will be paid next month and that rent was prepaid.

prepare journal entry to record manufacturing overhead applied to jobs during november.

Create T-account for manufacturing overhead, post appropiate information from parts A and B to this account, and calculate the ending balance .

Is manufacturing overhead overapplied or underapplied? using the balance in the balance overhead account calculated in part c, prepare the journal entry to close manufacturing overhead to cost of goods sold

Answer 1

A) Journal entries:
Date	Acc Title	Debit $	Credit $
1	Manufacturing overhead	40000
	Cash		40000
	(being indirect material cost incurred)
2	Manufacturing overhead	36000
	Wages payable		36000
	(being indirect labor cost made payable)
3	Manufacturing overhead	6000
	Prepaid rent		6000
	(being factory rent cost recorded)
4	Manufacturing overhead	13000
	Depreciation		13000
	(being factory depreciation cost recorded)
B)	Work in Process	122400		5100*24
	Manufacturing overhead		122400
	(overhead applied to production)
C) t-Account:
Manufacturing overhead a/c:
Debit	Amount $	Credit	Amount $
Ind. Mat.	40000	WIP	122400
Ind. Lab.	36000
Fact. Rent	6000
Fact. Depreci.	13000
COGS (over-applied)	27400
Total	122400	Total	122400
The manufacturing overhead over-applied by $27400.
D)
Date	Acc Title	Debit $	Credit $
	Manufacturing Overhead	27400
	Cost of Goods Sold (COGS)		27400
	(over applied overhead closed to COGS)