(L. OBJ. 3, 4) Allocating manufacturing overhead [15-20 min] Pater Foundry uses a prede...

(L. OBJ. 3, 4) Allocating manufacturing overhead [15-20 min]

Pater Foundry uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs, based on the machine hours required. At the beginning 2011, the company expected to incur the following:

At the end of 2011, the company had actually incurred:

Requirements

1. Compute Patel’s predetermined manufacturing overhead rate.

2. Record the summary journal entry for allocating manufacturing overhead.

3. Post the manufacturing overhead transactions to the Manufacturing overhead T-account. Is manufacturing overhead underallocated or ovcrallocated? By how much?

4. Close the Manufacturing overhead account to Cost of goods sold. Does your entry increase or decrease cost of goods sold?