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A manufacturing company has actual overhead of $570,000, budgeted overhead of $620,000, and budgeted ...

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A manufacturing company has actual overhead of $570,000, budgeted overhead of $620,000, and budgeted ...

A manufacturing company has actual overhead of $570,000, budgeted overhead of $620,000, and budgeted 18,000 direct labour hours. Management believes that direct labour hours are the best allocation base to use for allocation of overhead. Actual direct labour hours were 20,000 hours.

Assuming that the company used normal costing methods for allocation, and has the following account balances in its general ledger, what are the adjustments for each account using the proration method based on the amount of manufacturing overhead included in each account balance before proration?

   Account   Manuf OVH
   Balance   Included   Adjustment
Work-in-process control   $62,000   $12,400   ________
Finished Goods   $91,000   $16,380   ________
Cost of Goods Sold   $1,500,000   $330,000   ________

Textbook

Cost Accounting: A Managerial Emphasis, Canadian Edition

Edition: 7^th

Authors: Horngren, Datar, Rajan, Beaubien

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7 years ago

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Thank you, thank you, thank you!

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