Moredo, Eloisa Joy R.: Requirement 1
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Eloisa Joy MoredoMoredo, Eloisa Joy R.: Requirement 1
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Eloisa Joy MoredoMoredo, Eloisa Joy R.
Problem 6-1: Journal Entries for Manufacturing Overhead.
Requirement 1:
Work in Process 22040000
Applied Factory Overhead 22040000
To record applied factory overhead
(22800000/1200000mixers) x 1160000
Factory Overhead Control 22384000
Various Credits 22384000
To record actual factory overhead incurred
Requirement 2:
Actual Factory Overhead 22384000
Applied Factory Overhead 22040000
Underapplied Factory Overhead 344000
Problem 6-2 Disposition of Over or Underapplied Manufacturing Overhead
Requirement 1:
Work in Process Inventory 400
Finished Goods Inventory 2533
Cost of Goods Sold 5067
Underapplied Overhead 8000
To allocate underapplied overhead to inventories and cost of cost of goods sold
Computed as follows:
Work in Process (12000/240000) x 8000 = 400
Finished Goods (76000/240000) x 8000 = 2533
Cost of Goods Sold (152000/240000) x 8000 = 5067
Requirement 2:
Overapplied Overhead 8000
Work in Process Inventory 400
Finished Goods Inventory 2533
Cost of Goods Sold 5067
To close overapplied overhead to inventories and cost of goods sold
Requirement 3:
Cost of Goods Sold 10000
Underapplied Overhead 10000
To close underapplied overhead to cost of goods sold
Requirement 4:
Work in Process Inventory 400
Finished Goods Inventory 3200
Cost of Goods Sold 6400
Underapplied Overhead 10000
To close underapplied overhead to inventories and cost of goods sold
Computed as follows:
Work in Process (4000/100000) x 10000 = 400
Finished Goods (32000/100000) x 10000 = 3200
Cost of Goods Sold (64000/100000) x 10000 = 6400
Problem 6-3: Manufacturing Overhead Entries
Requirement A:
Work in Process 630000
Materials (18000 x 15) 270000
Factory Payroll (18000 x 17) 306000
Applied Factory Overhead (18000 x 3*) 54000
To record materials, labor and overhead charged
Production Factor overhead control may also be credited instead of Applied factory overhead
*(22000+16000+7000+5000+10000)/20000 = P3
Factory Overhead Control 56500
Various Credits 56500
To record actual factory overhead incurred
Applied Factory Overhead 54000
Underapplied Overhead 2500
Factory Overhead Control 56500
To record underapplied overhead
Alternative entry if applied factory overhead is not used
Underapplied overhead 2500
Factory Overhead Control 2500
Requirement B:
Cost of Goods Sold 2500
Underapplied Overhead 2500
To close underapplied overhead to cost of goods sold
Problem 7-7: Allocation of Actual Overhead – Direct, Step, and Simultaneous Solution
Method
Requirement 1:
Producing Department
P1 P2
Factory Overhead 400000 47600
Allocation of Service Department:
S1: 14400; (40% : 50%) 6400 8000
S2: 18000; (20% : 40%) 6000 12000
Total 120000 52400
Requirement 2:
S2 allocation (18000):
P1: 18000 x 20% = 3600
P2: 18000 x 40% = 7200
S1: 18000 x 40% = 7200
18000
S1 allocation (14400+7200=21600):
P1: 21600 x .40/.90 = 9600
P2: 21600 x .50/.90 = 12000
21600
Total Manufacturing Overhead After Allocation:
P1: 40000+3600+9600 = 53200
P2: 47600+7200+12000 = 66800
120000
Requirement 3:
S1 = 14400 +.40 S2
S2 = 18000 +.10 S1
Substitution:
S1 = 14400+.40(18000+.10 S1)
S1 = 14400+7200+.04 S1
.96 S1 = 21600
S1 = 22500
S2 = 18000+.10(22500)
S2 = 18000+2250
S2 = 20250
S1 Allocations:
S2: 22500 x .10 = 2250
P1: 22500 x .40 = 9000
P2: 22500 x .50 = 11250
S2 Allocations:
S1: 20250 x .40 = 8100
S1: 20250 x .20 = 4050
S1: 20250 x .40 = 8100
Total manufacturing overhead after allocation:
P1: 40000+9000+4050 = 53050
P2: 47600+11250+8100 = 66950
120000
