Question

Crystal Glassware Company has the following standards and flexible-budget data. $ 6.00 per direct-labor hour 2 hours per unit of output Standard variable-overhead rate Standard quantity of direct labor Budgeted fixed overhead Budgeted output $100,000 25,000 units Actual results for April are as follows: Actual output 20,000 units $320,000 97,000 50,000 hours Actual variable overhead Actual fixed overhead Actual direct labor Required: Prepare journal entries for the following transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Record the incurrence of actual variable overhead and actual fixed overhead. Add variable and fixed overhead to Work-in-Process Inventory. Close underapplied or overapplied overhead into Cost of Goods Sold.

Answer 1

Answer:

JOURNAL ENTRIES
S.NO.	ACCOUNTS TITLE AND EXPLANATION		DEBIT $	CREDIT $
1	Manufacturing Overheads Dr. (320000+97000)		$417,000
	Accounts payable			$417,000
	(for incurrance of Ohs on account)
2	Work in Process Inventory Dr.		$400,000
	Manufacturing Overheads			$400,000
	(for manufacturing OH applied on 50000 hours at rate of $8 per hour)
3	Cost of goods sold Dr.		$17,000
	Manufacturing Overheads			$17,000
	(for under-applied overheads to cost of goods sold)
Note: Pre-determined OH rate is computed as follows:
Variable OH rate				6 per hour
Fixed OH rate (Budgeted OH / Budgeted MH =100,000/50,000 MH)				2 per hour
Pre-determined OH rate				8 per hour