The Heat Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and...
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The Heat Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2020: Requirements 1. Compute the budgeted manufacturing overhead rate for 2020. 2. Compute the under- or overallocated manufacturing overhead of Heat Radiator in 2020. Adjust for this amount using the following: a. Write-off to Cost of Goods Sold b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold c. Proration based on the overhead allocated in 2020 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold 3. Which method do you prefer in requirement 2? Explain. Data table Budgeted manufacturing overhead costs S Overhead allocation base- Budgeted machine-hours 70,000 5,150,000 Manufacturing overhead costs incurred S Actual machine-hours 65,000 Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows: 2020 End-of-Year Balance Actual Machine-Hours 48,000 $ 7,500,000 1,500,000 10,000 7,000 1,000,000 Cost of Goods Sold Finished Goods Control Work-in-Process Control 4,900,000 Machine-hours The Heat Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2020: Requirements 1. Compute the budgeted manufacturing overhead rate for 2020. 2. Compute the under- or overallocated manufacturing overhead of Heat Radiator in 2020. Adjust for this amount using the following: a. Write-off to Cost of Goods Sold b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold c. Proration based on the overhead allocated in 2020 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold 3. Which method do you prefer in requirement 2? Explain. Data table Budgeted manufacturing overhead costs S Overhead allocation base- Budgeted machine-hours 70,000 5,150,000 Manufacturing overhead costs incurred S Actual machine-hours 65,000 Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows: 2020 End-of-Year Balance Actual Machine-Hours 48,000 $ 7,500,000 1,500,000 10,000 7,000 1,000,000 Cost of Goods Sold Finished Goods Control Work-in-Process Control 4,900,000 Machine-hours
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1 Budgeted Manufacturing Overhead Rate for 2020 Budgeted Manufacturing Overhead Rate Budgeted Manufacturing Overhead Costs Budgeted Machinehours Budgeted Manufacturing Overhead Rate 4900000 70000 mach... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9780135628478
17th Edition
Authors: Srikant M. Datar, Madhav V. Rajan
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