EBK COST ACCOUNTING
EBK COST ACCOUNTING
15th Edition
ISBN: 9780133812763
Author: Rajan
Publisher: VST
Question
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Chapter 4, Problem 4.39P

1.

To determine

Proration of Overhead:

Pro-ration approach under this a journal entry is pass to see the overhead cost is under allocated or over allocated. Work in progress, finished goods control and cost of goods sold account are debited and manufacturing overhead allocated and manufacturing overhead control account is credit in case of over allocation of overhead cost.

To compute: The overhead allocation rate.

Given information:

Budgeted direct labor cost is $225,000.

Budgeted overhead cost is $315,000.

2.

To determine

To compute: The ending balance of work in process and cost of goods sold before any adjustment of under or over allocated manufacturing overhead.

3.

To determine

To compute: The amount of under or over allocated manufacturing overhead.

4.a.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by (a) write off to cost of goods sold method.

4.b.

To determine

To compute: The ending balance of work in progress and cost of goods sold after adjustment by prorated using the overhead allocated in 2014 in the ending balance of cost of goods sold and work in progress control account.

5.

To determine

To explain: The method applied by company to dispose the under allocated manufacturing overhead among the above two options.

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