Assume that the following T accounts represent data from the Blackett Corporation's accounting records. Blackett uses the
Question:
Assume that the following T accounts represent data from the Blackett Corporation's accounting
records. Blackett uses the materials inventory for direct materials only with a separate supplies account
for indirect materials.
Write the missing amounts represented by the letters (a)-(g) next to the letter in each T-account.
Cost of Goods Sold Materials Inventory Finished Goods
18,250 (a) 2,250
(c) (d) 7,500 7,250
2,375 (f)
Work in Process Manufacturing Overhead
1,500 4,000 (g)
(b)
Labor 8,000
O/H (e) 19,650
2,900
b. Determine the company's predetermined overhead rate, based on direct material cost. Be sure to
express your answer as a rate.
c. Assume that Blackett desires to allocate overhead variances to Cost of Goods Sold, Work in Process
and Finished Goods, based upon ending balances in each account.
Compute the overhead variance (specify over/underapplied)
Based on ending account balances, determine the allocations to the 3 accounts (indicated above)
and provide a journal entry (below) that clears the overhead account.
JOURNAL
Account Descriptions | Debit | Credit |
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher