Sloan Manufacturing Corporation applies manufacturing overhead on the basis of 120% of direct labor cost. An analysis
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Question:
Sloan Manufacturing Corporation applies manufacturing overhead on the basis of 120% of direct labor cost. An analysis of the related accounts and job order cost sheet indicates that during the year total manufacturing overhead incurred was $420,000 and that at year-end Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $60,000, $40,000, and $300,000, respectively, of direct labor incurred during the current year.
a) Determine the over-applied manufacturing overhead at year-end (assume it is significant).
b) Prepare a journal entry to record the disposition of the over-applied manufacturing overhead.
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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