Callaway Golf Company has two departments and information for each one is shown below. Each department allocates
Question:
Callaway Golf Company has two departments and information for each one is shown below. Each department allocates overhead using a different base. NOTE: ALL INFORMATION BELOW IS FOR THE ENTIRE YEAR.
Estimated Actual Estimated Actual
Dept. Activity Base Overhead Overhead Activity Base Act.Base
Clubs Direct labor cost $180,000 $175,000 $ 60,000 $55,000
Bags Machine hours $144,000 $101,000 12,000hrs 13,000hrs
Instructions (SHOW ALL COMPUTATIONS or no credit given)
(a) Compute the predetermined overhead rate for each department.
(b) Compute the amount of overhead applied for each department for the year.
(c) Compute the amount of under- or over-applied overhead for each department.
(d) Record the journal entry to adjust the amount determined in part (c). for the “Bags" Department ONLY assuming it is adjusted at year-end.
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer