CHAPTER 3 Handout #3 With Solutions-1.docx - The University of Texas at Austin McCombs School of Business Fundamentals of Managerial Accounting Chapter

CHAPTER 3 Handout #3 With Solutions-1.docx - The University...

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The University of Texas at Austin McCombs School of Business Fundamentals of Managerial Accounting Chapter 3 - Handout #3 Product Costing Part 1 - Compute the firm’s predetermined overhead rate for the year using (a) machine hours as the activity driver.Part 2 – Assuming normal costing and (a) machine hours as the activity driver…prepare a journal entry to add to Work-In-Process inventory the total manufacturing overhead cost for the year.Part 3 - Compute the overapplied or underapplied overhead for the year using (a) machine hours as the cost driver.Part 4 - Prepare a journal entry to close out the balance in the Manufacturing Overhead account only to COGS.
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