Consider the following selected cost data for the Charles Forging Company for 2020. ...
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Accounting
Consider the following selected cost data for the Charles Forging Company for 2020.
Budgeted manufacturing overhead costs $7,500,000
Budgeted machine-hours 250,000
Actual manufacturing overhead costs $7,300,000
Actual machine-hours 245,000
The company uses normal costing. Its job-costing system has a single manufacturing overhead cost pool. Costs are allocated to jobs using a budgeted machine-hour rate. Any amount of underor overallocation is written off to Cost of Goods Sold.
a. Compute the budgeted manufacturing overhead rate.
b. Prepare the journal entries to record the allocation of manufacturing overhead.
c. Compute the amount of under- or over-allocation of manufacturing overhead. Is the amount under- or over-applied?
d. Need a journal entry to dispose of the under- or over-applied amount. Any amount of under- or overallocation is written off to Cost of Goods Sold.
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