The RowOnWave Company (ROW) produces a line of non-motorized boats. ROW uses a normal-costing system...
80.2K
Verified Solution
Link Copied!
Question
Accounting
The RowOnWave Company (ROW) produces a line of non-motorized boats. ROW uses a normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following data are for 2020:
Budgeted manufacturing overhead cost
$125,000
Budgeted direct manufacturing labor cost
$250,000
Actual manufacturing overhead cost
$115,000
Actual direct manufacturing labor cost
$220,000
2020 direct manufacturing
Account
Ending balance
labor cost in ending balance
Work in process
$33,400
$19,800
Finished goods
225,450
59,400
Cost of goods sold
576,150
140,800
Calculate the manufacturing overhead allocation rate. 2. Compute the amount of under- or overallocated manufacturing overhead. 3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overallocated manufacturing overhead is as follows: a. Written off to cost of goods sold b. Prorated based on ending balances (before proration) in each of the three accounts c. Prorated based on the overhead allocated in in the ending balances (before proration) in each of the three accounts
4. Which method would you choose? Justify your answer.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
