Exercise 3-46 Essay

393 Words2 Pages
1. Determine the company’s predetermined overhead application rate. 2. Determine the additions to the Work-in-Process Inventory account for direct material used, direct labor, and manufacturing overhead. 3. Compute the amount that the company would disclose as finished-goods inventory on the December 31, 20x2, balance sheet. 4. Prepare the journal entry needed to record the year’s completed production. 5. Compute the amount of under- or overapplied overhead at year-end, and prepare the necessary journal entry to record its disposition. 6. Determine the company’s 20x2 cost of goods sold. 7. Would it be appropriate to include selling and administrative expenses in either manufacturing overhead or cost of goods sold? Briefly explain. 1. Predetermined overhead application rate is equal to budgeted overhead divided by budgeted direct labor cost $546000/$4200000= 130.00% 2. Additions to the work in process accounts total $15,605,000. [5,600,000+$4,350,000+($4,350,000 x 130%)] 3.Finished goods inventory totaled $351,500. [$156,000+$85,000+($85,000 x 130%)] 4. The completed production journal entry is as follows: Finished goods inventory 15,761,800 Work in process inventory 15,761,800 There is no work in process at year end so it must be transferred to finsihed goods inventory by adding the beginning balance of work in process inventory of $156,000 to additions to the work in process inventory of $15,605,000. 5.There was a total of $5,655,000 of overhead applied . $4,350,000 x 130% Actual overhead wa $5,554,000 which resulted in overapplied overhead of $101,000 Indirect materials 65,000 Indirect labor 2,860,000 Factory depreciation 1,740,000 Factory

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