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
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 11P: Overhead application rate Creole Manufacturing Inc. uses a job order cost system and standard costs....
Related questions
Question
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05a639e3-77d0-4fe2-93f4-24b810a234c5%2F808fc150-f874-4c24-970f-d311d3f79396%2Fm9jssts_processed.png&w=3840&q=75)
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
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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.Recommended textbooks for you
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
![College Accounting, Chapters 1-27 (New in Account…](https://www.bartleby.com/isbn_cover_images/9781305666160/9781305666160_smallCoverImage.gif)
College Accounting, Chapters 1-27 (New in Account…
Accounting
ISBN:
9781305666160
Author:
James A. Heintz, Robert W. Parry
Publisher:
Cengage Learning