Problem #3 Chapter 3 (16 points)

Duffs Brewery uses normal costing. Its job-costing system has a single manufacturing overhead cost pool. Costs are allocated to jobs using a budgeted machine-hour rate. Any amount of under- or overallocation is written off to cost of goods sold. Below is the cost data for this problem:

Budgeted manufacturing overhead $900,000

Budgeted machine-hours 36,000

Budgeted labor hours 20,000

Actual manufacturing overhead $804,000

Actual machine hours 32,500

Actual labor hours 23,000

1. Compute the budgeted manufacturing overhead rate (4 pts)

2. Prepare the journal entry applying the overhead (4 pts)

3. Compute the amount of under- or overapplied of manufacturing overhead and state if it is under or overapplied (4 pts)

4. Prepare the journal entry for disposing the under- or overapplied overhead to COGS (4 pts)

(You dont have to worry about DM and DL for this problem, youre only being asked about overhead)