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Sagot :
Answer:
Journal Entry
Debit Work-in-Process $388,284
Credit Manufacturing Overhead $388,284
To record the application of factory overhead costs for the year.
Explanation:
a) Data and Calculations:
Estimated factory overhead costs = $348,400
Estimated direct labor hours = 47,000
Predetermined overhead rate = $7.41 ($348,400/47,000)
Actual overhead costs = $304,000
Actual direct labor hours = 52,400
Applied overhead costs = $388,284 (52,400 * $7.41)
b) The overhead applied to the production for the year will be the actual direct labor hours by the predetermined overhead rate. This yields a cost that is greater than the actual overhead costs, which means that the manufacturing overhead was overapplied. The cause of this situation is the number of actual direct labor hours worked vis-a-vis the actual overhead costs and the predetermined rate.
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