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Unformatted text preview: a. POHR = Estimated (or Budgeted or Forecasted) Annual Overhead/Estimated Annual Activity Level i. Labor Intensive environment = focus on DL costs ii. Highly automated environment = focus on DM costs 2. Apply overhead to production throughout the year a. Applied MOH = POHR x Actual Activity Level 3. Reconcile the difference b/w actual and applied (called “overhead variance”) a. b/c you’re estimations aren’t perfect The MOH costs (actual and applied) are accumulated in a temporary MOH account that is closed to COGS at the end of the period Debit Actual MOH Credit Applied MOH...
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- Spring '08