Question

please help with parts 1 and 2 of this problem. also at the end, July 31st has two entries

Exercise 2-5 (Video) Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $331,515 for the year, and machine usage is estimated at 125,100 hours. For the year, $356,850 of overhead costs are incurred and 131,000 hours are used. Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate per machine hour $ SHOW LIST OF ACCOUNTS What is the amount of under- or overapplied overhead at December 317 Manufacturing Overhead SHOW LIST OF ACCOUNTS Prepare the adjusting entry to assign the under or overapplied overhead for the year to cost of goods sold. (Credit account titles are automatically indented when amount is entered. Do not inder Debat Credit Account Titles and Explanation

Answer 1

Manufacturing overhead Rate = $2.67

Manufacturing Machine Hour Rate Total Overhead Total machine hours Machine hour Rate = Total Overhead/Total Hours 333515 125100 2.671

Manufacturing Over Underapplied = 7606 Underapplied

131000 349244 Actual Hours Applied Overhead = Hours* Machine Hour Rate =131000*2.67 Actual Overhead Underapplied Manufacturing overhead = Actual Overhead - Applied Overhead 356850 7606

Applied overhead is lower, the difference is called underapplied overhead.

Cost of completed Job $ 4775 1500 Direct Materials Direct Labor Applied Overhead 125% od Direct labor Total Cost Unit Cost (8150/2500) 1875 8150 - 3.26

Calculation Overhead Application Rate on Direct Labor Total Overhead 1875 Total Direct Labor cost 15001 Overhead Application Rate = Overhead/Labor*100 1875/1500*100 125%

Source Document Direct Materials Material Requsition Slip Direct Labor Time Ticket Manufacturing Overhead Invoices for bills, Schedulesfor depreciation, etc.

Total cost $8150

Unit Cost $3.26

8150 8150 Journal for completed job 31 Aug. Finished Goods Inventory Work in Process Inventory (Completion of three = 4300+5700+11200) 31 Aug. Cost of Goods sold Finished Goods Inventory (Transfer to Finished to Cost of goods sold) 8150 8150