Emirates Steel Manufacturing Co. estimates its predetermined overhead rate annually on the basis of machine hours....
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Emirates Steel Manufacturing Co. estimates its predetermined overhead rate annually on the basis of machine hours. At the beginning of the year 2019, The Company estimated manufacturing overhead expenses for the coming year would be AED 5,000,000 and it estimated that 40,000 machine hours would be required for the coming year. At the end of June, actual manufacturing overhead for the month was AED 768,000 and its actual machine hours was 6,000 hours. Before disposition of over- or under-applied overhead, the applied M.OH is shown in the following cost accounting balances for the month of June: WIP Finished Goods COGS Total AED 150,000 AED 270,000 AED 330,000 AED 750,000 Required: 1- Compute the over/underapplied amount for year? 2- Prepare the journal entry to dispose of the over/under-applied overhead using the COGS approach. 3- Prepare the journal entry to dispose of the over/under-applied overhead using the proration approach. Emirates Steel Manufacturing Co. estimates its predetermined overhead rate annually on the basis of machine hours. At the beginning of the year 2019, The Company estimated manufacturing overhead expenses for the coming year would be AED 5,000,000 and it estimated that 40,000 machine hours would be required for the coming year. At the end of June, actual manufacturing overhead for the month was AED 768,000 and its actual machine hours was 6,000 hours. Before disposition of over- or under-applied overhead, the applied M.OH is shown in the following cost accounting balances for the month of June: WIP Finished Goods COGS Total AED 150,000 AED 270,000 AED 330,000 AED 750,000 Required: 1- Compute the over/underapplied amount for year? 2- Prepare the journal entry to dispose of the over/under-applied overhead using the COGS approach. 3- Prepare the journal entry to dispose of the over/under-applied overhead using the proration approach.
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Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date:
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