Osborn Manufacturing uses a predetermined overhead rate of $ per direct laborhour. This predetermined rate was based on a cost formula that estimates $ of total manufacturing overhead for an estimated activity level of direct laborhours.
The company actually incurred $ of manufacturing overhead and direct laborhours during the period.
Required:
Calculate the underapplied or overapplied manufacturing overhead.
Assume the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the closing journal entry increase or decrease gross margin? By how much?Primare Corporation provided the following data for last months manufacturing operations.
Purchases of raw materials $
Indirect materials used in production $
Direct labor $
Manufacturing overhead applied to work in process $
Underapplied overhead $
Inventories Beginning Ending
Raw materials $ $
Work in process $ $
Finished goods $ $
Required:
Prepare a schedule of cost of goods manufactured.
Prepare a schedule of cost of goods sold. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.
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