Harwood Company's Job-order costing system applies overhead cost to jobs based on its machine-hours. The predetermined overhead rate of $2.60 per machine-hour was based on a cost formula that estimates $213,200 of total manufacturing overhead for an estimated activity level of 82,000 machine-hours. Required: 1. Assume during the year the company works only 77,000 machine-hours and Incurs the following costs in the Manufacturing Overhead and Work In Process accounts: Compute the overhead cost applied to Work In Process for the year and make the entry in your T-accounts. 2A. Compute the underapplied or overapplied overhead and show the balance in your Manufacturing Overhead T-account. 28. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.
Harwood Company's Job-order costing system applies overhead cost to jobs based on its machine-hours. The predetermined overhead rate of $2.60 per machine-hour was based on a cost formula that estimates $213,200 of total manufacturing overhead for an estimated activity level of 82,000 machine-hours. Required: 1. Assume during the year the company works only 77,000 machine-hours and Incurs the following costs in the Manufacturing Overhead and Work In Process accounts: Compute the overhead cost applied to Work In Process for the year and make the entry in your T-accounts. 2A. Compute the underapplied or overapplied overhead and show the balance in your Manufacturing Overhead T-account. 28. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter2: Job Order Costing
Section: Chapter Questions
Problem 4BE: Applying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000...
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Exercise 3-9 (Algo) Applying Overhead; T-accounts; Journal Entries [LO3-1, LO3-2, LO3-4]
Harwood Company's Job-order costing system applies overhead cost to jobs based on its machine-hours. The predetermined
overhead rate of $2.60 per machine-hour was based on a cost formula that estimates $213,200 of total manufacturing overhead for an
estimated activity level of 82.000 machine-hours.
Required:
1. Assume during the year the company works only 77,000 machine-hours and Incurs the following costs in the Manufacturing
Overhead and Work in Process accounts: Compute the overhead cost applied to Work In Process for the year and make the entry in
your T-accounts.
2A. Compute the underapplied or overapplied overhead 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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2A Required 2B
Compute the overhead cost applied to Work in Process for the year and make the entry in your T-accounts.
Manufacturing Overhead
Work in Process
Debit
(Maintenance)
(Indirect materials)
(Indirect labor)
(Utilities)
(Insurance)
(Depreciation)
Balance
23,000
8,200
75,000
34,000
7,200
58,000
Credit
(a)
(Direct materials)
(Direct labor)
(Overhead) (a)
< Required 1
Debit
730,000
92,000
Required 2A >
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd94b7f38-2ee8-4799-bf1e-32c66d2726fa%2F241d934a-d32f-46ce-9479-16f0b78c336f%2F46wyune_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 3-9 (Algo) Applying Overhead; T-accounts; Journal Entries [LO3-1, LO3-2, LO3-4]
Harwood Company's Job-order costing system applies overhead cost to jobs based on its machine-hours. The predetermined
overhead rate of $2.60 per machine-hour was based on a cost formula that estimates $213,200 of total manufacturing overhead for an
estimated activity level of 82.000 machine-hours.
Required:
1. Assume during the year the company works only 77,000 machine-hours and Incurs the following costs in the Manufacturing
Overhead and Work in Process accounts: Compute the overhead cost applied to Work In Process for the year and make the entry in
your T-accounts.
2A. Compute the underapplied or overapplied overhead 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.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2A Required 2B
Compute the overhead cost applied to Work in Process for the year and make the entry in your T-accounts.
Manufacturing Overhead
Work in Process
Debit
(Maintenance)
(Indirect materials)
(Indirect labor)
(Utilities)
(Insurance)
(Depreciation)
Balance
23,000
8,200
75,000
34,000
7,200
58,000
Credit
(a)
(Direct materials)
(Direct labor)
(Overhead) (a)
< Required 1
Debit
730,000
92,000
Required 2A >
Credit
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