Is Manufacturing Overhead underapplied or overapplied for the year? Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account.
Predetermined overhead rate = $ 153,000 / 36,000 machine hours = $ 4.25 per machine hour.
Overhead applied during the year = 40,000 machine hours x $ 4.25 = $ 170,000.
Overhead incurred during the year = $ 167,000.
Manufacturing overhead overapplied : $ 170,000 - $ 167,000 = $ 3,000.
Indirect materials | $ 38,000 |
Indirect labor | 27,000 |
Heat, power and water costs | 42,000 |
Insurance | 9,000 |
Depreciation | 51,000 |
Total manufacturing overhead incurred | $ 167,000 |
Adjusting entry to dispose of overapplied manufacturing overhead:
Debit | Credit | |
Manufacturing Overhead | $ 3,000 | |
Cost of Goods Sold | $ 3,000 |
Is Manufacturing Overhead underapplied or overapplied for the year? Prepare a journal entry to properly dispose...
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