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Question - Because the Hamed Company used a budgeted indirect-cost rate for its manufacturing operations, the amount allocated ($200,000) was different from the actual amount incurred ($225,000).
Ending balances in the relevant accounts are: Work-in-Process $10,000, Finished Goods 20,000 Cost of Goods Sold 170,000.
Required -
a. What is the journal entry used to write off the difference between allocated and actual overhead directly to cost of goods sold?
b. What is the journal entry used to write off the difference between allocated and actual overhead using the proration approach?
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