a) Compute the firm’s predetermined overhead rate, which is based on direct-labour hours. b) Calculate the over-applied or under-applied overhead for 2021. c) Prepare a journal entry to close out the Manufacturing Overhead Account into Cost of Goods Sold. d) Activity based costing (ABC) is an alternative method of allocating overheads. How is ABC useful to managers? The following information pertains to Sandy Sand Company for 2021.Budgeted direct-labour cost:----90,000 hours at $24 per hourActual direct-labour cost:--95,000 hours at $25.50 per hour.Budgeted Manufacturing Overhead: ----$ 985,500Actual Manufacturing Overhead:Depreciation- $ 240,000Property Taxes--12,000Indirect Labour --82,000Supervisory Salaries -----200,000Utilities---59,000Insurance-30,000Rental of Space--- 300,000Indirect Material_79,000

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Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter16: Job Order Costing

Section: Chapter Questions

Problem 4CMA: Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and...

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a) Compute the firm’s predetermined overhead rate, which is based on direct-labour hours.
b) Calculate the over-applied or under-applied overhead for 2021.
c) Prepare a journal entry to close out the Manufacturing Overhead Account into Cost of Goods Sold.
d) Activity based costing (ABC) is an alternative method of allocating overheads. How is ABC useful to managers?

The following information pertains to Sandy Sand Company for 2021.
Budgeted direct-labour cost:
----90,000 hours at $24 per hour
Actual direct-labour cost:
--95,000 hours at $25.50 per hour.
Budgeted Manufacturing Overhead: -
---$ 985,500
Actual Manufacturing Overhead:
Depreciation
- $ 240,000
Property Taxes--
12,000
Indirect Labour -
-82,000
Supervisory Salaries ---
--200,000
Utilities---
59,000
Insurance
-30,000
Rental of Space--
- 300,000
Indirect Material
_79,000

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