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pr lower will Required: 1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: B Work in 000 Process Manufacturing Overhead (Maintenance) (Indirect materials) 21,000 (Direct materials) (Direct labor) 710,000 8,000 90,000 (Indirect labor) (Utilities) (Insurance) (Depreciation) 60,000 (Overhead) 32,000 7,000 56,000 Copy the data in the T-accounts above onto vour

pr lower will Required: 1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: B Work in 000 Process Manufacturing Overhead (Maintenance) (Indirect materials) 21,000 (Direct materials) (Direct labor) 710,000 8,000 90,000 (Indirect labor) (Utilities) (Insurance) (Depreciation) 60,000 (Overhead) 32,000 7,000 56,000 Copy the data in the T-accounts above onto vour

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter4: Job-order Costing And Overhead Application
Section: Chapter Questions
Problem 59P: (Appendix 4A) Unit Cost, Ending Work in Process, Journal Entries During August, Leming Inc. worked...
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EXERCISE 3-9 Applying Overhead; T-accounts; Journal Entries LO3-1, LO3-2, LO3-4 Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.40 per machine-hour was based on a cost formula that estimates $192,000 of total manufacturing overhead for an estimated activity level of 80,000 machine-hours. aleh 00 Required: 1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Manufacturing Work in Overhead 000 Process (Maintenance) (Indirect materials) 21,000 ? (Direct materials) (Direct labor) 710,000 8,000 90,000 (Indirect labor) (Utilities) (Insurance) (Depreciation) 60,000 (Overhead) 32,000 7,000 56,000 abood berdel Copy the data in the T-accounts above onto your answer sheet. Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. 3. Explain why the manufacturing overhead was underapplied or overapplied for the year. 8888
Transcribed Image Text:EXERCISE 3-9 Applying Overhead; T-accounts; Journal Entries LO3-1, LO3-2, LO3-4 Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.40 per machine-hour was based on a cost formula that estimates $192,000 of total manufacturing overhead for an estimated activity level of 80,000 machine-hours. aleh 00 Required: 1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Manufacturing Work in Overhead 000 Process (Maintenance) (Indirect materials) 21,000 ? (Direct materials) (Direct labor) 710,000 8,000 90,000 (Indirect labor) (Utilities) (Insurance) (Depreciation) 60,000 (Overhead) 32,000 7,000 56,000 abood berdel Copy the data in the T-accounts above onto your answer sheet. Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. 3. Explain why the manufacturing overhead was underapplied or overapplied for the year. 8888
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