Asked by Adeeb Ebaad on May 10, 2024
Verified
The predetermined overhead rate for Shilling Manufacturing is based on estimated direct labor costs of $350,000 and estimated factory overhead of $770,000.Actual costs incurred were:
a.Calculate the predetermined overhead rate and calculate the overhead applied during the year.
b.Prepare the journal entry to eliminate the over- or underapplied overhead,assuming that it is not material in amount.
Predetermined Overhead Rate
A rate used to assign overhead costs to products or jobs, calculated before the period begins based on an estimate of costs.
Overapplied Overhead
A scenario in which the overhead costs attributed to manufacturing exceed the overhead expenses that were actually incurred.
Underapplied Overhead
A situation where the allocated factory overhead costs are less than the actual overhead costs incurred, leading to a discrepancy in cost accounting.
- Compute and elucidate the occurrence of over- or underapplied overhead within a job order costing framework.
- Calculate the preset overhead rate by employing various estimated and actual expenses.
Verified Answer
Overhead applied = $347,000 * 220% = $763,400
b.
Learning Objectives
- Compute and elucidate the occurrence of over- or underapplied overhead within a job order costing framework.
- Calculate the preset overhead rate by employing various estimated and actual expenses.
Related questions
The Following Information About the Zhang Company Is Available on ...
Kiker Incorporated Makes a Single Product--An Electrical Motor Used in ...
Gallucci Incorporated Makes a Single Product--A Critical Part Used in ...
The Marlow Corporation Uses a Standard Cost System and Applies ...
Landis Company Uses a Job Order Cost System in Each ...