Penski Co. applies overhead based upon machine hours. Budgeted factory overhead cost was $280,000, budgeted...
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Accounting
Penski Co. applies overhead based upon machine hours. Budgeted factory overhead cost was $280,000, budgeted labor hours were 12,000 hours, and budgeted machine hours were 14,000. Actual overhead was $225,000, actual labor hours were 15,000 hours, and actual machine hours were 12,500. Before disposition of underapplied or overapplied factory overhead, the cost of goods sold was $525,000, and gross profit was $60,000.
REQUIRED:
a. Determine the budgeted factory-overhead rate.
b. Determine the applied overhead.
c. Prepare the journal entry for overhead applied. (1 point)
d. Compute the overapplied or underapplied overhead.
e. Prepare the journal entry for adjusting the mis-applied overhead to the cost of goods sold. (1 point)
f. Compute adjusted gross profit.
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