The following data pertain to the Oneida Restaurant Supply Company for the year just ended. Budgeted sales revenue $ 210,000 Actual manufacturing overhead 364,000 Budgeted machine hours (based on practical capacity) 20,000 Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate $ 13 Budgeted manufacturing overhead $ 336,000 Actual machine hours 11,000 Actual direct-labor hours 18,000 Actual direct-labor rate $ 16 Required: Prepare a journal entry to add to work-in-process inventory the total manufacturing overhead cost for the year, assuming: 1. The firm uses actual costing. 2. The firm uses normal costing, with a predetermined overhead rate based on machine hours. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Question

Marin Mitchell

Business

6 July, 03:01

The following data pertain to the Oneida Restaurant Supply Company for the year just ended. Budgeted sales revenue $ 210,000 Actual manufacturing overhead 364,000 Budgeted machine hours (based on practical capacity) 20,000 Budgeted direct-labor hours (based on practical capacity) 20,000 Budgeted direct-labor rate $ 13 Budgeted manufacturing overhead $ 336,000 Actual machine hours 11,000 Actual direct-labor hours 18,000 Actual direct-labor rate $ 16 Required: Prepare a journal entry to add to work-in-process inventory the total manufacturing overhead cost for the year, assuming: 1. The firm uses actual costing. 2. The firm uses normal costing, with a predetermined overhead rate based on machine hours. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Logan Hammond · Answer 1

The journal entry is shown below:

1. Under Actual costing:

Work in progress inventory Ac Dr $364,000

To Manufacturing overhead A/c $364,000

(Being manufacturing overhead is added to the work in progress inventory)

2. Under Normal costing,

First we have to compute the predetermined overhead rate which is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) : (estimated machine hours)

= $336,000 : 20,000 hours

= $16.8

Now we have to find the actual overhead which equal to

= Actual machine hours * predetermined overhead rate

= 11,000 hours * $16.8

= $184,800

Work in progress inventory Ac Dr $184,800

To Manufacturing overhead A/c $184,800

(Being manufacturing overhead is added to the work in progress inventory)