Consider the following selected cost data for the Clypton Company for 2019. Budgeted manufacturing overhead costs...
- Consider the following selected cost data for the Clypton Company for 2019.
Budgeted manufacturing overhead costs $1,500,000
Budgeted machine-hours 150,000
Actual manufacturing overhead costs $1,300,000
Actual machine-hours 125,000
The company uses normal costing. Its job-costing system has a single manufacturing overhead cost pool. Costs are allocated to jobs using a budgeted machine-hour rate. Any amount of under- or overallocation is written off to Cost of Goods Sold.
- Compute the budgeted manufacturing overhead rate. (1pt)
- Calculate the manufacturing overhead allocated during 2019. (1pt)
- Compute the amount of under- or overallocation of manufacturing overhead. Is the amount material? Prepare a journal entry to dispose of this amount. (2pts)
Homework Answers
Budgetted Manufacturing Overhead rate = $ 1500,000/150,000 hours => $ 10 per hour.
Manufacturing Overhead allocated => 125,000 hours* 10$ = 1250,000.
Under-allocation = Actual Applied ie., 1300,000-1250,000 = $ 50,000.
And yes this amount is material. The journal entry is:
| Cost of Goods sold Dr | 50,000 | |
| To Manufacturing Overhead | 50,000 | |
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Consider the following selected cost data for the Clypton
Company for 2019.
Budgeted manufacturing overhead costs...
Consider the following selected cost data for the Clypton Company for 2019. Budgeted manufacturing overhead costs...
Consider the following selected cost data for the Clypton Company for 2019. Budgeted manufacturing overhead costs $1,500,000 Budgeted machine-hours 150,000 Actual manufacturing overhead costs $1,300,000 Actual machine-hours 125,000 The company uses normal costing. Its job-costing system has a single manufacturing overhead cost pool. Costs are allocated to jobs using a budgeted machine-hour rate. Any amount of under- or overallocation is written off to Cost of Goods Sold. Compute the budgeted manufacturing overhead rate. Calculate the manufacturing overhead allocated during 2019....
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1.
Compute the budgeted manufacturing overhead rate
for
2017.
2.
Compute the under- or overallocated manufacturing
overhead of
Home
Radiator in
2017.
Dispose of this amount using the following:
a.
Write-off to Cost of Goods Sold
b.
Proration based on ending balances (before proration) in
Work-in-Process Control, Finished Goods Control, and Cost of Goods
Sold
c.
Proration based on the overhead allocated in
2017
(before proration) in the ending balances of Work-in-Process
Control, Finished Goods Control, and Cost of Goods...
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