Managerial Accounting Homework? Check for me

Posted on 2014-03-14 10:00:00 in Accounting by SHAWNLARSEN1

Problem

Cambridge Corporation produces small appliances. Job A allocates manufacturing overhead using machine hours as the allocation base. Data for April, 2012, are shown below:



Job. A

Estimated manufacturing overhead costs for 2012 $90,000

Estimated direct labor cost for 2012 $50,000

Estimated machine hours for 2012 30,000

Actual manufacturing overhead costs for April $7,000

Actual direct labor cost for April $3,000

Actual machine hours for April 2,200



A) Determine the predetermined manufacturing overhead rate for Job A.

B) Is Job A over or under applied? By how much?

C) What adjusting journal entry would need to be made to ensure costs of goods sold is correct for Job A?



A) Estimated MO cost/Estimated Allocation base = $90,000/30,000 = $3.00 per direct labor hour.

B) $2,200 x $3.00 = $6,600 MOH Applied ; $7,000.00 Actual MOH – $6,600.00 MOH = $400.00 Under Applied.

C) The underapplied overhead at the end of a period is closed out to Cost of Goods Sold



I made 2 T Charts showing the 400.00 amount that was under Applied to close out the Manufacturing Overhead account, and than applied it to the CGS T chart.



Man OH

Applied: | Actual:

6,600.00 | 7,000.00

400.00 |





CGS:

6,000.00 |

400.00 |

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