Question

Question 32 During the first quarter of 2020, Frenchie Company reports the following: 1. Estimated overhead $221,914 2. Actual overhead $220,370 3. Estimated labour costs $169,400 4. Actual labour costs $175,800 The company allocates its overhead on the basis of direct labour cost. Calculate the predetermined overhead rate. (Round answer to the nearest whole percentage, e.g. 152%.) Predetermined overhead rate LINK TO TEXT LINK TO TEXT Calculate the over- or under-applied manufacturing overhead. (Round answers to the nearest whole dollar, e.g. 5,275.) Actual manufacturing overhead Applied manufacturing overhead Manufacturing overhead LINK TO TEXT LINK TO TEXT Prepare the adjusting entry to close the under- or over-applied overhead. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, e.g. 5,275.) Account Titles and Explanation Debit Credit

Answer 1

Answers

• [1]
  Predetermined overhead rate = ($221914 estimated overhead / $ 169400 estimated labor cost) x 100
  = 131%
• [2]
  >Actual Overhead = $ 220,370
  >Applied Overhead = $ 175800 actual labor cost x 131% = $ 230,298

Manufacturing Overhead $ 9,928 OVER-Applied [230298 – 220370]

• [3]

Accounts title	Debit	Credit
Manufacturing Overhead	$9,928
Cost of Goods Sold		$9,928

--adjustment entry for over-applied overhead.