Question

Rieb Inc. has provided the following data for the month of September. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

	Work In Process			Finished Goods			Cost of Goods Sold			Total
Direct materials	$	3,710		$	8,790		$	47,310		$	59,810
Direct labor		9,870			24,120			130,050			164,040
Manufacturing overhead applied		6,280			10,990			61,230			78,500
Total	$	19,860		$	43,900		$	238,590		$	302,350

Manufacturing overhead for the month was overapplied by $7,150.

The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

Required:

Provide the journal entry that would record the allocation of underapplied or overapplied among work in process, finished goods, and cost of goods sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Journal entry for allocating the overapplied manufacturing overhead
Date	Account Title	Debit	Credit
	Manufacturing overhead	7150
	Work in process		572
	Finished goods		1001
	Cost of goods sold		5577
	Working:
		Total	Work in	Finished	Cost of
			process	goods	goods sold
	Manufacturing overhead applied	78500	6280	10990	61230
	Percentage		8.00%	14.00%	78.00%
	Allocation of manufacturing overhead overapplied	7150	572	1001	5577
	Allocation is based on the percentage of the overhead applied to each head to the total overhead applied.