Allocating and adjusting manufacturing overheadThe manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:RequirementsHow many machine hours did Sporty Kayaks use in 2018?Was manufacturing overhead overallocated or underallocated for the year and by how much?Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead. Overhead allocated to productionActual manufacturing overhead costsPredetermined overhead allocation rate$ 409,200432,000$ 44 per machine hour

1. Number of machine hours Sporty Kayaks used in 2018 = Overhead allocated to production /…

Answered: Overhead allocated to production Actual…

Overhead allocated to production Actual manufacturing overhead costs Predetermined overhead allocation rate $ 409,200 432,000 $ 44 per machine hour

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Allocating and adjusting manufacturing overhead

The manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:

Requirements

How many machine hours did Sporty Kayaks use in 2018?
Was manufacturing overhead overallocated or underallocated for the year and by how much?
Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead.

Overhead allocated to production
Actual manufacturing overhead costs
Predetermined overhead allocation rate
$ 409,200
432,000
$ 44 per machine hour

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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