ACCT 3121 Chapter : Cost Analysis And Control - Chapter04 Solutions
Document Summary
Jamison woodworking uses normal costing and allocates manufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or overallocated overhead, if immaterial, is written off to cost of goods sold. Required: compute the budgeted manufacturing overhead rate, prepare the summary journal entry to record the allocation of manufacturing overhead, compute the amount of under- or overallocated manufacturing overhead. Prepare the journal entry to dispose of the under- or overallocated overhead. Manufacturing overhead allocated (212,000 direct labor-hours per direct labor-hour = ,664,000: work-in-process control. ,650,000 ,664,000 = ,000 overallocated, an insignificant amount of difference compared to manufacturing overhead costs allocated ,000 ,664,000 = 0. 3%. If the quantities of work-in-process and finished goods inventories are small, the difference between proration and write off to cost of goods sold account would be very small compared to net income. The university of chicago press is wholly owned by the university.
