Selected cost data for Classic Print Co. are as follows: Estimated manufacturing

Question

Selected cost data for Classic Print Co. are as follows: Estimated manufacturing overhead cost for the year Estimated direct labor cost for the year Actual manufacturing overhead cost for the year Actual direct labor cost for the year $125,000 78,125 116,000 67,000 Requirements 1. Compute the predetermined overhead allocation rate per direct labor dollar. 2. Prepare the journal entry to allocate overhead costs for the year. 3. Use a T account to determine the amount of underallocated or overallocated manufacturing overhead. 4. Prepare the journal entry to adjust for the underallocated or overallocated manu- facturing overhead.

Explanation / Answer

Requirements 1) Predetermined overhead rate Estimated MOH/Estimated direct labor cost 125,000/78,125 1.6 2) Overhead allocated actual direct labor cost * OH rate 67,000*1.6 107200 3) T- Account Manufacturing Overhead Actual MOH 116,000 Applied MOH 107,200 Bal(under applied) 8,800 4) Journal Entry Accounting titles & Explanations Debit Credit Cost of goods sold 8,800 Manufacturing overhead 8,800

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