Homework answers / question archive / Exercise 3-9 Applying Overhead; T-accounts; Journal Entries [LO3-1, LO3-2, LO3-4] Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours

Exercise 3-9 Applying Overhead; T-accounts; Journal Entries [LO3-1, LO3-2, LO3-4] Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours

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Exercise 3-9 Applying Overhead; T-accounts; Journal Entries [LO3-1, LO3-2, LO3-4]

Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.20 per machine-hour was based on a cost formula that estimates $202,400 of total manufacturing overhead for an estimated activity level of 92,000 machine-hours.

 

Required:

1. Assume that during the year the company works only 87,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts.

2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account.

2B. Prepae a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold.

 

• Req 1

Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts.

REQ1

 

Manufacturing Overhead Work in Process

(Maintenance)33,000 (a)______ (Direct materials)830,000

(Indirect materials)9,200 (Direct labor)102,000

(Indirect labor)60,000 (Overhead) (a)_____________

(Utilities)44,000

(Insurance)8,200

(Depreciation)40,000

Balance

 

 

REQ 2A

Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-Account from Req 1.

 

 

______ Manufacturing overhead ________

 

 

 

REQ 2B

 

Prepar a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

 

Event General journal debit credit

1 _______________ _______ _______

_______________ _______ _______

_______________ _______ _______

_______________ _______ _______

_______________ _______ _______

_______________ _______ _______