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Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,000 Estimated direct labor hours 10,000 hours Actual direct...

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Accounting

Estimated manufacturing overhead $ 500,000

Actual manufacturing overhead $ 550,000

Estimated direct labor hours 10,000 hours

Actual direct labor hours 10,500

13.

Calculate the predetermined overhead allocation rate usingdirect labor hours as the allocation base.

14.

Determine the amount of overhead allocated during the year.Record the journal entry.

15.

Determine the amount of underallocated or overallocatedoverhead. Record the journal entry to adjust ManufacturingOverhead.

Answer & Explanation Solved by verified expert
4.1 Ratings (865 Votes)

13 Calculation of predetermined overhead allocation rate
Estimated manufacturing overhead (A) $ 500,000.00
Estimated direct labor hours (B)        10,000.00
predetermined overhead allocation rate ( C)=(A)/(B) $            50.00
14 Calculation of the amount of overhead allocated during the year.
Actual direct labor hours (A)        10,500.00
predetermined overhead allocation rate (B) $            50.00
The amount of overhead allocated during the year ( C)=(A)*(B) $ 525,000.00
Journal Entry
Debit Credit
Work-in-Process Inventory $ 525,000.00
            Manufacturing Overhead $ 525,000.00
To Record to allocate overhead cost for the year.
15 Calculation of amount of underallocated or overallocated overhead
Underallocated overhead=$550,000-$525,000 $    25,000.00
Journal Entry
Debit Credit
Cost of Goods Sold $    25,000.00
              Manufacturing Overhead $    25,000.00

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