Question

! Required information [The following information applies to the questions displayed below.] Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to work-in- process on the basis of machine hours. On January 1 of the current year, there were no balances in work- in-process or finished-goods inventories. The following estimates were included in the current year's budget. Total budgeted manufacturing overhead Total budgeted machine hours $ 282,000 47,000 During January, the firm began the following production jobs: A79: 1,000 machine hours N08: 2,500 machine hours P82: 500 machine hours During January, job numbers A79 and NO8 were completed, and job number A79 was sold. The actual manufacturing overhead incurred during January was $26,000.

Answer 1

Answer: first we have to calculate overopplied or underapplied overhead 24000 26000 Applied Manufacturing overhead (wit) Actual manufacturing Overhead underapplied manufacturing overhead $2000 WNI: Applied Manufacturing overhead - Actual Machine hours x Predetermined overhead Rate yoou hours x $6 6 . $24000 WN2- predetermined overhead Rate Budgeted manufacturing overhead Budgeted machine hours $282,000 47000 hours $6 per machine hour

Now, Journal entry to close the under applied overhead to cost of Goods sold are as follows: D8 2007 1. FO 200 Cost of Goods sold To Manufacturing overhead (Being underapplied Overhead charged to cost of Goods sold)

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