Accounting for manufacturing overheadElegant Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2018 follow:RequirementsCompute the predetermined overhead allocation rate. Round to two decimal places.Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.Prepare the journal entry to adjust for underallocated or overallocated overhead.The predetermined overhead allocation rate usually turns out to be inaccurate. Why don’t accountants just use the actual manufacturing overhead rate? EstimatedActual32,200 hours$ 27,500Machine hours24,500 hoursMaintenance labor (repairs to equipment)$ 19,000Plant supervisor's salary41,00046,000Screws, nails, and glue21,00041,000Plant utilities42,00097,850Freight out39,00044,500Depreciation on plant and equipment83,80082,000Advertising expense46,00060,000

Answered: Estimated Actual 32,200 hours $ 27,500…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Accounting for manufacturing overhead

Elegant Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2018 follow:

Requirements

Compute the predetermined overhead allocation rate. Round to two decimal places.
Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.
Prepare the journal entry to adjust for underallocated or overallocated overhead.
The predetermined overhead allocation rate usually turns out to be inaccurate. Why don’t accountants just use the actual manufacturing overhead rate?

Estimated
Actual
32,200 hours
$ 27,500
Machine hours
24,500 hours
Maintenance labor (repairs to equipment)
$ 19,000
Plant supervisor's salary
41,000
46,000
Screws, nails, and glue
21,000
41,000
Plant utilities
42,000
97,850
Freight out
39,000
44,500
Depreciation on plant and equipment
83,800
82,000
Advertising expense
46,000
60,000

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions