Question

5. Financial and Managerial Accounting (ACCTG 10 an Weygandt, Financial and Managerial, 3e tice Assignment Gradebook ORION Downloadable eTextbook ment CALCULATOR FULL SCREEN PRINTER VERSION BACK NE! 12:20 PM / Remaining: 57 min. Question 5 Vaughn Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $295,395 for the year, and machine usage is estimated at 125,700 hours. For the year, $316,040 of overhead costs are incurred and 130,400 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 31? 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 indent manually.) Debit Credit Account Titles and Explanation

Answer 1

i):- Manufacturing overhead rate = Estimated manufacturing overhead / Estimated Hours

=$295,395 / 125,700 hours = $2.35

2):- Calculation of amount of under applied or over applied

Applied overhead = Manufacturing overhead rate X Actual hours = $2.35 X 130,400 = $306,440

Manufacturing overhead under applied/overhead applied at December 31 = Actual overhead - Applied overhead

= $316,040 -$306,440 = $9600 ( Under applied)

3):- Adjusting entry of assigning the under applied overhead on cost of good sold

Account titles and explanation	Debit $	Credit $
Cost of good sold	9600
Manufacturing overhead		9600

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