Actual Direct Labor Assignment
Classic Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Classic Uniforms reports the following cost data for the past year: Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the predetermined manufacturing overhead rate, Enter the formula for predetermined manufacturing overhead rate, then compute the rate. Estimated yearly overhead costs / Estimated yearly machine-hours = Predetermined overhead rate per machine hour Requirement 2. Calculate the allocated manufacturing overhead for the past year. Manufacturing overhead allocated = Requirement 3. Compute the under-allocated or overallocated manufacturing overhead. How will this under-allocated or overallocated manufacturing overhead be disposed of?
First calculate the preliminary manufacturing overhead balance using the T-account. Manufacturing Overhead Close the under-or overallocated overhead to Cost of Goods Sold by journalizing the entry. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Accounts Debit Credit TAITE Requirement 4. How can managers use accounting information to help control manufacturing overhead costs? with the budgeted amounts. Managers will also investigate only To help control manufacturing overhead, managers compare the actual line item amounts for differences between actual and budgeted amounts to identify the reasons why actual costs Data Table Budget Actual Direct labor hours….. ………. 7,600 6,800 Machine hours……………………….. hours $ 20,000 $ 49,000 6,200 hours 6,400 hours $ 20,000 $ 52,500 Depreciation on salespeople's autos ……….. Indirect materials … Depreciation on trucks used to deliver uniforms ………………….. to customers Depreciation on plant and equipment … Indirect manufacturing labor. $ 12,500 $ 68,000 $ 42,000 $ 19,500 $ 24,600 $ 72,500 $ 11,500 $ 69,500 $ 45,000 $ 21,500 $ 26,600 $ 84,500 Customer service hotline…………………. Plant utilities. …………………………. Direct labor cost…………………………
