Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies
Question:
Actual results reported by department and product during the year are as follows:
Required:
1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product.
2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product.
3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm?
4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?
Step by Step Answer:
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen