Question

Fairfield Company applies manufacturing overhead to products at a predetermined rate of $66 per direct labor hour. Its actual manufacturing costs for the most recent period are summarized here:

Item	Description			Total Cost
Direct materials	Used on Jobs 101 and 102				72,000
Indirect materials	Used on multiple jobs				14,600
Hourly labor wages	920 hours @ $33 per hour
	170 hours for Job 101 =	$	5,610
	320 hours for Job 102 =		10,560
	430 hours for Job 103 =		14,190		30,360
Factory supervision					4,150
Production engineer					5,000
Factory janitorial work					1,500
Selling, general, and administrative salaries					8,400
Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.)					6,200
Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.)					4,100

1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet

Record the transfer of manufacturing overhead account balance to cost of goods sold.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a

Answer 1

Actual manufacturing overhead =14600 Indirect material +4150 factory supervision+5000 production engineer

      + 1500janitorial+6200 other overhead

     =31450

Applied overhead : Direct labor hours *rate

        = 920*66

          = $ 60720

Overhead overapplied =Actual -applied

        = 31450-60720

           = -29270

Account	Debit	credit
Manufacturing overhead	29270
cost of good sold		29270
[Being overhead overapplied closed]