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Prepare journal entry to close the manufacturing overhead

Assignment Help Managerial Accounting
Reference no: EM132527978

The following information relates to Beautiful Designs Pty Ltd for the year just ended:

Budgeted direct labour cost: 80000 hours @ $22 per hour

Actual direct labour cost: 78000 hours @ $25 per hour

Budgeted manufacturing overhead: $1048000

Actual manufacturing overhead:

Depreciation: $256000

Property taxes: 19000

Indirect labour: 88000

Supervisory salaries: 210000

Electricity: 48000

Insurance: 25000

Factory rent: 290000

Indirect material (see data below): 64000

Indirect material:

Beginning inventory, 1 January: $60000

Purchases: 84000

Ending inventory, 31 December: 80000

Required:

Question 1: Calculate the firm's predetermined overhead rate, which was based on direct labour hours.

Question 2: Calculate the over-applied or under-applied overhead for the year.

Question 3: Prepare journal entry to close the manufacturing overhead account to cost of goods sold.

Question 4: What caused the over-applied or under-applied overhead?

Reference no: EM132527978

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