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