Question

Portland Outfitters, a manufacturer of fly fishing flies, uses a normal-costing system with a single overhead cast pool and direct labor as the cost-allocation base. The following data are for 2020: (Click the icon to view the following data.) Read the requirements i Data Table Requirement 1. Compute the budgeted manufacturing overhead rate for 2020 Begin by selecting the formula you will use. In the next step enter the amounts and calculate the rate. (Enter the rate as a whole percentage, X%) Budgeted manufacturing overhead rate Requirement 2. Compute the under-or overallocated manufacturing overhead of Portland Outfitters in 2020. Begin by selecting the formula you will use. In the next step enter the amounts in the formula and compute the under-or overallocated manufacturing overhead Manufacturing overhead = underallocated (overallocated) Budgeted manufacturing overhead costs S 1,320.000 Overhead allocation base Direct Labor Cost Budgeted direct labor cost S 550,000 Actual manufacturing overhead costs incurred S 1,311,000 Actual direct labor cost S 580,000 Manufacturing overhead allocated data and the ending balances (before proration of under or overallocated overhead) in each account are as follows: 2020 End-of-Year Mig OH Allocated Balance Cost of Goods Sold S 870,000 $ 3.100,000 Finished Goods Control 290,000 1.200.000 Work-In-Process Control 232,000 5,700.000 Print Done a. Adjust for this amount using a write-off to Cost of Goods Sold. Show the account balances after the write-off. Account Balance After Proration Cost of Goods Sold Finished Goods Control Work-In-Process Control (2 Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

1)

Budgeted manufacturing overhead cost	/	Budgeted direct labor cost	=	Budgeted manufacturing overhead rate
1320000	/	550000	=	2.40 or 240% of direct labor cost

2)Allocated manufacturing overhead =Actual direct labor cost *Budgeted manufacturing overhead rate

                      = 580000*2.4

                      = 1392000

Actual manufacturing overhead	-	Allocated manufacturing overhead	=	Manufacturing overhead underallocated (overallocated)
1311000	-	1392000		(81000)

3)

a)Overallocated overhead closed to cost of goods only

	Account balance after proration
Cost of goods sold	3100000-81000= 3019000
Finished goods control	1200000
Work in process control	5700000

b)Weights :

	Ending balance before allocation	weights
Cost of goods sold	3100000	3100000/10000000= .31
Finished goods control	1200000	1200000/10000000=.12
Work in process control	5700000	5700000/10000000=.57
Total	10000000

	(overallocated overhead)	*	Weights	=	Adjustment
Cost of goods sold	(81000)		.31		(25110)
Finished goods control	(81000)		.12		(9720)
Work in process control	(81000)		.57		(46170)

	Account balance after proration
Cost of goods sold	3100000-25110= 3074890
Finished goods control	1200000-9720= 1190280
Work in process control	5700000-46170=5653830

c)

	Manufacturing overhead allocated	weights
Cost of goods sold	870000	870000/1392000= .625
Finished goods control	290000	290000/1392000=.208
Work in process control	232000	232000/1392000=.167
Total	1392000

	(overallocated overhead)	*	Weights	=	Adjustment
Cost of goods sold	(81000)		.625		(50625)
Finished goods control	(81000)		.208		(16848)
Work in process control	(81000)		.167		(13527)

	Account balance after proration
Cost of goods sold	3100000-50625= 3049375
Finished goods control	1200000-16848= 1183152
Work in process control	5700000-13527= 5686473