Question

Actual indirect materials costs Actual indirect labor costs Other overhead costs Overhead applied Storm Concert Promotions $11,800 56,300 17,800 93,200 Valle Home Builders $ 6,300 46,200 49,600 96,700 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 Valle GJ Valle Determine whether overhead is overapplied or underapplied. Indirect materials Indirect labor Other overhead costs Factory Overhead-Storm 11,800 93,200 Applied overhead 56,300 17,800 [ 7,300 < Factory OH Storm GJ Storm >

Answer 1

Storm Concert Promotions:
Ans. A	*Actual overhead = Indirect materials + Indirect labor + Other overhead
	$11,800 + $56,300 + $17,800
	$85,900
	Over applied overhead = Applied overhead - Actual overhead
	$93,200 - $85,900
	$7,300
	If the applied overhead is less than the Actual overhead
	it means that the overhead is under applied.
	Factory overhead
	Particulars	Amount	Amount	Particulars
	Actual indirect materials cost	$11,800	$93,200	Applied overhead
	Actual indirect labor cost	$56,300
	Other overhead costs	$17,800
	Over applied overhead	$7,300
		$93,200	$93,200
Ans. B	Journal entry to record the over applied overhead:
Transaction	Particulars	Debit	Credit
1	Factory overhead	$7,300
	Cost of goods sold		$7,300
	(To record over applied overhead)
Valle Home Builders:
Ans. A	*Actual overhead = Indirect materials + Indirect labor + Other overhead
	$6,300 + $46,200 + $49,600
	$102,100
	Under applied overhead =   Actual overhead -   Applied overhead
	$102,100 - $96,700
	$5,400
	If the applied overhead is less than the Actual overhead
	it means that the overhead is under applied.
	Factory overhead
	Particulars	Amount	Amount	Particulars
	Actual indirect materials cost	$6,300	$96,700	Applied overhead
	Actual indirect labor cost	$46,200	$5,400	Under applied overhead
	Other overhead costs	$49,600
	Total	$102,100	$102,100
Ans. B	Journal entry to record the under applied overhead:
Date	Particulars	Debit	Credit
31-Dec	Cost of goods sold	$5,400
	Factory overhead		$5,400
	(To record under applied overhead)