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Patel Foundry uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on the machine hou
P. i Data Table At the beginning of 2018, the company expected to incur the following: Manufacturing overhead costs $ 850,000
Compute Patels predetermined overhead allocation rate. Prepare the journal entry to allocate manufacturing overhead. Post th
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Answer #1
1.) Predetermined overhead allocation rate $ 10 =850000/85000
(Per Machine Hour)
2.) Account Titles Debit $ Credit $
Work in process Inventory 650,000
Manufacturing overhead 650,000
(65,000 x 10 )
3.) Manufacturing   Overhead
Incurred                576,500 Allocated 650,000
(520,000 + 36,500 + 20,000 )
Manufacturing overhead is Overallocated by $ 73,500 .( 650,000 - 576,500 ).
4.) Account Titles Debit $ Credit $
Manufacturing overhead 73,500
Cost of goods sold    73,500
This entry will result in Decrease in cost of goods sold.
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