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Chapter 17: Q7SE (page 940)

Rosco Company estimates the company will incur $80,750 in overhead costs and 4,750 direct labor hours during the year. Actual direct labor hours were 4,600. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base, and prepare the journal entry for the allocation of overhead.

Short Answer

Expert verified

The predetermined overhead allocation rate is $17 per hour.

Date	Particulars	Debit ($)	Credit ($)
	Work in process labor	78,200
	Manufacturing overhead		78,200

Step by step solution

01

Predetermined overhead allocation rate

02

Allocation during the year

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Most popular questions from this chapter

Question: Using job order costing in a service company

Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.

Requirements

1. What is Roth’s predetermined overhead allocation rate?

Selected cost data for Classic Print Co. are as follows:

Estimated manufacturing overhead cost for the year	$125,000
Estimated direct labor cost for the year	78,125
Actual manufacturing overhead cost for the year	116,000
Actual direct labor cost for the year	67,000

Requirements

2. Prepare the journal entry to allocate overhead costs for the year.

If a company incurred \(5,250 in actual overhead costs and allocated \)5,575 to jobs, was the overhead overallocated or underallocated? By how much?

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

d. Companies that produce large numbers of identical products.

Question: The following information pertains to Smith Company for the year:

Estimated manufacturing overhead	\(500,000	Actual manufacturing overhead	\)550,000
Estimated direct labor hours	10,000 hours	Actual direct labor hours	10,500 hours

13. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base.

14. Determine the amount of overhead allocated during the year. Record the journal entry.

15. Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing

Overhead.

See all solutions

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