Ask Question
5 February, 19:56

PA11.

LO 4.6When setting its predetermined overhead application rate, Tasty Box Meals estimated its overhead would be $100,000 and would require 25,000 machine hours in the next year. At the end of the year, it found that actual overhead was $102,000 and required 26,000 machine hours.

Determine the predetermined overhead rate.

What is the overhead applied during the year?

Prepare the journal entry to eliminate the underapplied or overapplied overhead.

+4
Answers (1)
  1. 5 February, 20:00
    0
    (a) $4 per machine hour

    (b) $104,000

    Explanation:

    (a) Predetermined overhead rate:

    = Estimated overhead : Machine hours

    = $100,000 : 25,000

    = $4 per machine hour

    (b) Overhead applied during the year:

    = $4 per machine hour * 26,000

    = $104,000

    (c) Overapplied overhead,

    since overhead applied is greater than the actual overhead by [$104,000 - $102,000] $2,000.

    The journal is as follows:

    Manufacturing overhead A/c Dr. $2,000

    To Cost of goods sold A/c $2,000

    (Being the Overapplied overhead is recorded)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “PA11. LO 4.6When setting its predetermined overhead application rate, Tasty Box Meals estimated its overhead would be $100,000 and would ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers