1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Manufacturing Work in Overhead Process 21,000 ? (Maintenance) (Indirect materials) (Direct materials) (Direct labor) (Overhead) 710,000 8,000 90,000 (Indirect labor) (Utilities) (Insurance) (Depreciation) 60,000 ? 32,000 7,000 56,000 Copy the data in the T-accounts above onto your answer sheet. Compute the amount of over- head cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2. Compute the amount of underapplied or overapplied overhead for the year and show the bal- ance in your Manufacturing Overhead T-account. Prepare a journal entry to close the com- pany's underapplied or overapplied overhead to Cost of Goods Sold. 3. Explain why the manufacturing overhead was underapplied or overapplied for the year.

1. Assume that during the year the company works only 75,000 machine-hours and incurs the following costs in the Manufacturing Overhead and Work in Process accounts: Manufacturing Work in Overhead Process 21,000 ? (Maintenance) (Indirect materials) (Direct materials) (Direct labor) (Overhead) 710,000 8,000 90,000 (Indirect labor) (Utilities) (Insurance) (Depreciation) 60,000 ? 32,000 7,000 56,000 Copy the data in the T-accounts above onto your answer sheet. Compute the amount of over- head cost that would be applied to Work in Process for the year and make the entry in your T-accounts. 2. Compute the amount of underapplied or overapplied overhead for the year and show the bal- ance in your Manufacturing Overhead T-account. Prepare a journal entry to close the com- pany's underapplied or overapplied overhead to Cost of Goods Sold. 3. Explain why the manufacturing overhead was underapplied or overapplied for the year.

Name: Harwood Company uses a job-order costing system that applies overhead
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Description: 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 $2.40 per machine-hour was based on a cost formula that estimates $192,000 of total manufac

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 2PA: York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of...

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