A-1 Furniture Manufacturing produces recliners. In June, the two production depa
ID: 2397829 • Letter: A
Question
A-1 Furniture Manufacturing produces recliners. In June, the two production departments have budgeted allocation bases of 5000 machine hours in department 1 and 10,000 direct manufacturing labor hours in department 2. The budgeted manufacturing overhead for June was $70,000 for Dept. 1 and $60,000 for Dept. 2. For Job A, the actual costs incurred in the two departments were as follows:
Dept. 1 Dept. 2
Direct materials purchased on account$120,000$180,000
Direct materials used34,000 15,000
Direct manufacturing labor54,00055,000
Indirect manufacturing labor12,00010,000
Indirect materials used7,000 5,000
Equipment lease15,0005,000
Plant utilities2,0001,000
Job A incurred 900 machine hours in Dept. 1 and 400 manufacturing labor hours in Dept. 2.The company uses a budgeted overhead rate for applying overhead to production.
a)Determine the budgeted manufacturing overhead rate for each department.
b)Prepare the necessary journal entries to summarize the June transactions for Dept. 1.
Explanation / Answer
a)
Budgeted manufacturing overhead rate = Budgeted manufacturing overhead / Mchine Hours
b) Journal Entries:
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Budgeted manufacturing overhead $ 70,000 Mchine Hours 5000 Budgeted manufacturing overhead rate $ 14.00Related Questions
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