Southern Rim Parts estimates its manufacturing overhead to be $495,000 and its direct labor costs...
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Accounting
Southern Rim Parts estimates its manufacturing overhead to be $495,000 and its direct labor costs to be $900,000 for year 1. The first three jobs that Southern Rim worked on had actual direct labor costs of $20,000 for Job 301, $30,000 for Job 302, and $40,000 for Job 303. For the year, actual manufacturing overhead was $479,000 and total direct labor cost was $850,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates.
Overhead applied in each of the inventory accounts is as follows:
Work-in-process inventory
$
37,400
Finished goods inventory
102,850
Cost of goods sold
327,250
Required:
Prepare an entry to prorate the under- or overapplied overhead.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet
Record the allocation of over- or underapplied overhead.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
Answer & Explanation
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