Question

Actual indirect materials costs Actual indirect labor costs Other overhead costs Overhead applied Storm Concert Promotions $12,000 55,500 17,100 91,600 Valle Home Builders $ 6,900 47,100 49,800 98, 200 Storm Concert Promotions Determine whether overhead is overapplied or underapplied. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold Valle Home Builders Determine whether overhead is overapplied or underapplied. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Factory OH Storm GJ Storm Factory OH G Valle Valle Prepare the journal entry to allocate (close) overapplied or underapplied overhead to cost of Goods Sold. < Prex 2 of 7 Next >

Answer 1

Storm Concert Promotions

Actual overhead = Actual Indirect Material Costs + Actual Indirect Labour Cost + Other Overhead Costs

= $12,000 + $55,500 + $17,100 =$84,600.

Overhead Applied > Actual Overhead

So the overhead is over applied

Amount of Over Applied Overhead = Overhead Applied - Actual Overhead

= $91,600 - $84,600

= $7,000

Journal Entry

Transaction	General Journal	Debit	Credit
1.	Manufacturing Overhead Cost of Goods Sold	7,000	7,000

Valle Home Builders

Actual Overhead = Actual Indirect Material Costs +Actual Indirect Labour Cost +Other Overhead Costs

=$6,900 + $47,100 + $49,800

= $103,800

Overhead Applied < Actual Overhead

So the overheard is under applied.

Amount of Under Applied Overhead = Overhead Applied - Actual Overhead

= $98,200 - $103,800

=$5,600

Journal Entry

Transaction	General Journal	Debit	Credit
1.	Cost of Goods Sold Manufacturing Overheads	5,600	5,600