Question

Applied vs. Actual Manufacturing Overhead

Davis Manufacturing Corporation applies manufacturing overhead on the basis of 150% of direct labor cost. An analysis of the related accounts and job order cost sheet indicates that during the year total manufacturing overhead incurred was $472,500 and that at year-end Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold included $60,000, $30,000, and $210,000, respectively, of direct labor incurred during the current year.

a. Determine the under applied manufacturing overhead at year-end (assume it is significant).

Applied Manufacturing Overhead
Work in process	$Answer
Finished goods	Answer
Cost of goods sold	Answer
Total:	$Answer

Under-applied manufacturing overhead $Answer

b. Prepare a journal entry to record the disposition of the underapplied manufacturing overhead.

General Journal
Description	Debit	Credit
Answer	Answer	Answer
Answer	Answer	Answer
Answer	Answer	Answer
Answer	Answer	Answer

Answer 1