Company manufactures high quality musical instruments for professional musicians. The company uses normal costing and...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Company manufactures high quality musical instruments for professional musicians. The company uses normal costing and allocates manufacturing overhead based on direct labor hours.
For 2020, the budgeted manufacturing overhead was $500,000 and the budgeted labor-hours were 10,000. The actual hourly wage paid to workers was $42 and the actual labor cost was $462,000. The actual manufacturing overhead was $600,000.
Before any adjustments, the ending balances in the following accounts are:
Direct materials $500,000
Work-in-Process 250,000
Finished Goods 750,000
Cost of Goods Sold 3,000,000
Prepare a journal entry that prorates the write-off of the difference between the allocated and actual overhead using the proration approach based on the ending account balances.
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!
