Reference no: EM133071029

Question - The Kristopher Company uses a job-costing system at its plant. The plant has a Machining Department and an Assembly Department. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the Machining Department overhead, allocated to jobs based on actual machine-hours, and the Assembly Department overhead, allocated to jobs based on actual direct manufacturing labor cost). The 2018 budget for the plant is:

	Machining	Assembly
Manufacturing overhead	$1,800,000	$3,600,000
Direct manufacturing labor cost	$1,400,000	$2,000,000
Machine-hours	50,000	200,000

At the end of 2018, the actual manufacturing overhead costs were $2,100,000 in Machining and $3,700,000 in Assembly. A total of 55,000 actual machine-hours were used in Machining and total actual direct manufacturing labor costs in Assembly were $2,200,000.

Required -

1. Determine the predetermined manufacturing overhead rate for each department.

2. Calculate under or over-allocated overhead for each department.

3. Assuming that the company uses the write-off to cost of goods sold approach method, prepare the journal entries to write off the under or over-allocated overhead for each department.