Mark Corporation estimates its manufacturing overhead to be $148,000 and its dir

Question

Mark Corporation estimates its manufacturing overhead to be $148,000 and its direct labor costs to be $370,000 for year 1. The actual direct labor costs were $67,000 for Job 301, $92,000 for Job 302, and $185,000 for Job 303 during year 1; the actual manufacturing overhead was $128,000. Overhead applied in each of the inventory accounts is as follows: Prepare an entry to allocate the under- or overapplied overhead. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Calculation of over or under applied Manufacturing overhead Total manufacturing overhead applied 137600 Total manufacturing overhead cost actually incurred 128000 Over-applied manufacturing overhead 9600 Allocation among work in process finished goods, and cost of goods sold accounts Particulars Amt Percentage Work in process 20640 15% finished goods 41280 30% cost of goods sold 75680 55% 137600 100% Journal Entry to allocate over applied overhead Particulars Debit Credit Manufacturing Overhead 9600 Work in process 1440 finished goods 2880 cost of goods sold 5280

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