Prepare the journal entry to close the overhead accounts

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Reference no: EM132692800

Question - XYZ Company had the following information:

Budgeted overhead $75,000

Actual overhead $80,000

Budgeted Direct-labor hours 20,000

Ending balances in the following accounts:

Ending Balance Actual DLH in Ending Balance

Raw Materials Inventory $40,000 0

Work In Process Inventory $30,000 2,100

Finished Goods Inventory $60,000 8,400

Cost of Goods Sold $210,000 10,500

Required -

Prepare the journal entry using the adjusted allocation method, ie. prorate the under- or over-allocated manufacturing overhead based on the overhead allocated in the ending balances of WIP, F/G and COGS

Prepare the journal entry to close the overhead accounts using the proration method, ie., prorate the under- or over-allocated manufacturing overhead based on the ending balances in WIP, F/G and COGS.

Prepare the journal entry to close the overhead accounts if the balance in (c) is considered immaterial and written off to COGS.

Reference no: EM132692800

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