Question

please solve all requirements 1-4.. thank you (:

TI Question Help The Ride-On-Wwerway Company CROW) produces a line of non-motorized boats. ROW uses a normal.costing system and allocates marcturing overhead using direct manufacturing labor cost. The following data are for 2017: lick the boon to view the data) Inventory balances on December 31, 2017 were as follows (click the icon to view the count balances) Read more Requirement 1. Calculate the manufacturing overhead location rate dently the formula and calculate the marutacturing overhead location rate (Enter the result as a whole number) Overhead alocation rate Requirement 2. Compute the amount of under er overallocated manufacturing overhead Identify the formula and calculate the under or manutacturing overallocated overhead (Use parentheses or a minus sign to report overheat overalocated) - Underalocated overalocated) Requirement 3. Calculate the ending balances in work in process, finished goods and cost of goods sold it under or overallowed manufacturing overhead is as follows: (a) written of to cost of goods sold, I promated based on ending wance (before proration in each of the tree accounts, (c) promated based on the overhead allocated in 2017 in the ending balance before pronation in each of the wee accounts (a) Calculate the ending balances in work in process, fished goods and cost of goods sold under overallocated manufacturing overheat is written off to cost of goods sold Account Ending Balance Work in process Finished goods Cost of goods sold

Answer 1

1	Calculate the manufacturing overhead allocation rate
	Budgeted Manufacturing overhead cost	/	Budgeted Manufacturing labour cost	=	overhead allocation rate
	121000	/	220000	=	55%
2	computation of under or over allocated overhead rate
	Actual Manufacturing overhead	-	Allocated Direct Manufacturing Overhead	=	under allocated (over allocated)
	118750	-	123750	=	5000

3

3
a	Ending Balance	$
	Work in process	42750
	Finished Goods	247950
	Cost of goods sold	564300
b	working
			Proportionate decimal
	Work in process	42750	0.05
	Finished Goods	247950	0.29
	Cost of goods sold	564300	0.66

	Proportionate decimal	x	Under(over)allocated overhead	Adjustment
Work in process	0.05		5000	250
Finished Goods	0.29		5000	1450
Cost of goods sold	0.66		5000	3300
	Ending Balance(original)	+	Adjustment	Ending Balance (Adjusted)
Work in process	42750	+	250	43000
Finished Goods	247950	+	1450	249400
Cost of goods sold	564300	+	3300	567600

3.c

Particulars	Ending Balance	overhead rate	Allocated Manufacturing overhead	Proportionate decimal
Work in process	18000	55%	9900	0.08
Finished Goods	58500	55%	32175	0.26
Cost of goods sold	148500	55%	81675	0.66
	Total		123750

	Proportionate decimal	x	Under(over)allocated overhead	Adjustment
Work in process	0.08		5000	400
Finished Goods	0.26		5000	1300
Cost of goods sold	0.66		5000	3300
	Ending Balance(original)	+	Adjustment	Ending Balance (Adjusted)
Work in process	42750	+	400	43150
Finished Goods	247950	+	1300	249250
Cost of goods sold	564300	+	3300	567600

4. The method that makes most sense is method is write off the adjustment to cost of goods sold.

    The amount of the over -under allocation of overhead is immaterial. So the simplest method is acceptable