Harwood Company uses a job-order costing system that predetermined overhead over
ID: 2332784 • Letter: H
Question
Harwood Company uses a job-order costing system that predetermined overhead overhead for an estimated activity level of 85,000 machine-hours. applies overhead cost to jobs on the basis of machine-hours. The company's rate of $2.90 per machine-hour was based on a cost formula that estimates $246,500 of total manufacturing Required 1 Assume that during the year the company works only 80,000 machine-hours and incurs the following costs in the Manufacturing Overhead and make the entry in your T-accounts 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. 2B. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold elook and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year Complete this question by entering your answers in the tabs below Rea 1 Req 2A Req 2B Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts 26,000 Direct materials) 60,000 Prey 1 of 3 Next pe here to search
Explanation / Answer
T account :
b) Under applied manufacturing overhead $5000
c) Journal entry :
Manufacturing overhead Work in process Maintenance 26000 Work in process (2.9*80000) 232000 Direct material 760000 Indirect material 8500 Direct labour 95000 Indirect labour 86000 Manufacturing overhead 232000 Utilities 37000 Insurance 7500 Depreciation 72000 Total 237000 Balance 5000