Problem 11-18 (Part Level Submission) Bechtel Technical Clothing produces parkas
ID: 2470085 • Letter: P
Question
Problem 11-18 (Part Level Submission) Bechtel Technical Clothing produces parkas used by arctic explorers, mountain climbers, and people living in Minnesota. The company uses a standard costing system, and standards call for 2.5 yards of material at $55 per yard for each parka. The standard cost for labor is 3.5 hours at $35 per hour. Standard overhead is $14 per unit. For the year 2015, expected production is 7,500 parkas with fixed overhead of $53,000 and variable overhead of $6.5 per parka. During 2015, 8,500 parkas were manufactured. The company purchased 22,300 yards of material at a cost of $1,248,800. Production required 22,300 yards of material. The cost of direct labor was $1,000,000 for 27,600 hours. Actual overhead for the year was $86,900. All purchases are on account.
Prepare a journal entry to record actual overhead and overhead applied. Record manufacturing overhead to Miscellaneous Accounts. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Explanation / Answer
1.Journal entry to record applied manufacturing overhead
Work in process(8500×14) 119000
Applied manufacturing overhead. 119000
2. Journal entry to record actual manufacturing overhead
manufacturing overhead(actual) 86900
Miscellaneous account. 86900