Aspen Company estimates its manufacturing overhead to be $601,200 and its direct labor costs to be $501,000 for year 2. Aspen worked on three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $203,250. Job 2-2, which was completed, but not sold at the end of the year, had actual direct labor costs of $406,500. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of $67,750. Actual manufacturing overhead for year 2 was $800,300. Manufacturing overhead is applied on the basis of direct labor costs.
Required:
Prepare an entry to allocate over- or underapplied overhead to Work in Process, Finished Goods and Cost of Goods Sold.
Aspen Company estimates its manufacturing overhead to be $601,200 and its direct labor costs to be $501,000 for year 2. Aspen worked on three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $203,250. Job 2-2, which was completed, but not sold at the end of the year, had actual direct labor costs of $406,500. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of $67,750. Actual manufacturing overhead for year 2 was $800,300. Manufacturing overhead is applied on the basis of direct labor costs.
Required:
Prepare an entry to allocate over- or underapplied overhead to Work in Process, Finished Goods and Cost of Goods Sold.
Related questions
Exercise 7-28 Prorate Over- or Underapplied Overhead (LO 7-3)Aspen Company estimates its manufacturing overhead to be $516,000and its direct labor costs to be $516,000 for year 2. Aspen workedon three jobs for the year. Job 2-1, which was sold during year 2,had actual direct labor costs of $205,125. Job 2-2, which wascompleted, but not sold at the end of the year, had actual directlabor costs of $467,685. Job 2-3, which is still in work-in-processinventory, had actual direct labor costs of $147,690. Actualmanufacturing overhead for year 2 was $828,200. Manufacturingoverhead is applied on the basis of direct labor costs.
| Required: |
| Prepare an entry to allocateover- or underapplied overhead to Work in Process, Finished Goodsand Cost of Goods Sold. |
Southern Rim Parts estimates its manufacturing overhead to be$282,000 and its direct labor costs to be $940,000 for year 1. Thefirst three jobs that Southern Rim worked on had actual directlabor costs of $53,000 for Job 301, $78,000 for Job 302, and$115,000 for Job 303. For the year, actual manufacturing overheadwas $459,000 and total direct labor cost was $846,000.Manufacturing overhead is applied to jobs on the basis of directlabor costs using predetermined rates.
Overhead applied in each of the inventory accounts is asfollows:
| Work-in-process inventory | $ | 25,380 |
| Finished goodsinventory | 63,450 | |
| Cost of goodssold | 164,970 | |
Required:
Prepare an entry to prorate the under- or overapplied overhead.(If no entry is requiredfor a transaction/event, select "No journal entry required" in thefirst account field.)
