(SHOW ALL COMPUTATIONS or no credit given) 3. Callaway Golf Company has the foll
ID: 2518310 • Letter: #
Question
(SHOW ALL COMPUTATIONS or no credit given)
3. Callaway Golf Company has the following departments and information for each one is shown below. Each department allocates overhead using a different base. NOTE ALL INFORMATION BELOW IS FOR THE ENTIRE YEAR Estimated Actual Estimated Actua1 Dept Activity Base Overhead Overhead Activity Base ActivitiY Direct labor cost $ 88,750 $100,000 Clubs $165, 600 Balls 10,500hrs $125, 000 Machine hours $ 60,000 $ 58,000 10,000hrs Instructions (SHOW ALL COMPUTATIONS or no credit given) A. For each department listed above, compute the following: (1) predetermined overhead rate for each department. (2) amount of overhead applied for each department for the year. (3) amount of under- or over-applied overhead for each department. B. Record the journal entry to adjust the amount determined in part A (3). for the "Clubs" ONLY assuming it is adjusted at year-end.Explanation / Answer
1) Predetermine overhead rate :
Clubs = 88750*100/125000 = 71% of direct labour cost
Balls = 60000/10000 = 6 per machine hour
2) Overhead applied
Clubs = 165600*71% = 117576
Balls = 10500*6 = 63000
3) Calculate under over applied overhead :
Clubs = 100000-117576 = 17576 over applied
Balls = 58000-63000 = 5000 over applied
b) Journal entry :
Date accounts & explanation debit credit Manufacturing overhead 17576 Cost of goods sold 17576 (To record overapplied overhead) Manufacturing overhead 5000 Cost of goods sold 5000 (To record overapplied overhead)Related Questions
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