Custom Woods manufactures jewelry boxes The primary materials wood brass
Custom Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for 2016 follow:
1. Compute the predetermined overhead allocation rate.
2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.
3. Prepare the journal entry to adjust for underallocated or overallocated overhead.
4. The predetermined overhead allocation rate usually turns out to be inaccurate. Why don’t accountants just use the actual manufacturing overhead rate?
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