Question

Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.60 per machine-hour was based on a cost formula that estimates $228,800 of total manufacturing overhead for an estimated activity level of 88,000 machine-hours. Required: 1. Assume that during the year the company works only 83,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2A. Compute the amount of underapplied or overapplied overhead for the year and show the balance in your Manufacturing Overhead T-account. 2B. Prepare a journal entry to close the company's underapplied or overapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Compute the amount of overhead cost that would be applied to Work in Process for the year and make the entry in your T-accounts. Work in Process 790,000 (a) (Direct materials) (Direct labor) (Overhead) (a) 98,000 Manufacturing Overhead 29,000 8,800 72,000 40,000 7,800 64,000 (Maintenance) (Indirect materials) (Indirect labor) (Utilities) (Insurance) (Depreciation) Balance Reg 1 Req 2A >

Answer 1

Answer-:

1.) overhead applied

=Predetermined overhead rate * actual machine hours

=$2.60 *83000 machine hours

=$215800

Manufacturing overhead				work in process
	Maintenance	29,000	215800	(a)		Direct mat	790,000
	indirect materials	8,800				direct labor	98,000
	indirect labor	72,000				OH (a)	215800
	utilities		40,000
	insurance		7,800
	Depreciation	64,000
	Balance		5,800

2-a)

under applied

manufacturing overhead

5,800

2-b).

Event	General Journal		Debit	Credit
	1)	Cost of goods sold	5800
		Manufacturing overhead	5800

Thankyou.......