I can not figure this out. During the month of September, Reading Inc. applied o

Question

I can not figure this out. During the month of September, Reading Inc. applied overhead to jobs using an overhead rate of $0.80 per dollar of direct labor. Direct labor in August was $65,000. Actual overhead in August was $51,200. Actual overhead was composed of the following items: Indirect materials $ 21,200 Indirect labor 6,800 Utilities 1,400 Depreciation 12,500 Repair expense 9,300 Total $51,200 Determine the balance in manufacturing overhead and prepare a journal entry to close the balance to cost of goods sold???. ?

Explanation / Answer

Remember they stated at the very beginning that they would charge $0.80 for each dollar of direct labor as an overhead. 65,000 * 0.8 = 52,000 Now add both overheads. 52,000 + 51,200 = $103,200 Answer $103,200 Hope this helps, best of luck.

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