Ch4 34 37 solutions

Ch4 34 37 solutions - 4-34Proration of overhead.1. Budgeted...

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Unformatted text preview: 4-34Proration of overhead.1. Budgeted manufacturing overhead rate is $4,800,000 80,000 hours = $60 per machine-hour. 2.Manufacturing overheadunderallocated=Manufacturing overheadincurred Manufacturing overheadallocated= $4,900,000 $4,500,000*= $400,000*$60 75,000 actual machine-hours = $4,500,000a.Write-off to Cost of Goods SoldAccount(1)AccountBalance(Before Proration)(2)Write-off of $400,000UnderallocatedManufacturing Overhead(3)AccountBalance(After Proration)(4) = (2) + (3)Work in ProcessFinished GoodsCost of Goods SoldTotal$ 750,0001,250,0008,000,000$10,000,000$ 400,000$400,000$ 750,0001,250,0008,400,000$10,400,000b.Proration based on ending balances (before proration) in Work in Process, Finished Goods and Cost of Goods Sold.Account(1)Account Balance(Before Proration)(2)Proration of $400,000UnderallocatedManufacturingOverhead(3)AccountBalance(After Proration)(4) = (2) + (3)Work in ProcessFinished GoodsCost of Goods SoldTotal$ 750,0001,250,0008,000,000$10,000,000( 7.5%)(12.5%)(80.0%)100.0%0.075 $400,000 = $ 30,0000.125 $400,000 = 50,0000.800 $400,000 = 320,000$400,000$ 780,0001,300,0008,320,000$10,400,000c.Proration based on the allocated overhead amount (before proration) in the ending balances of Work in Process, Finished Goods, and Cost of Goods Sold.Account(1)AccountBalance(BeforeProration)(2)Allocated OverheadIncluded inthe Account Balance(Before Proration)(3) (4)Proration of $400,000UnderallocatedManufacturing Overhead(5)AccountBalance(After Proration)(6) = (2) + (5)Work in Process$ 750,000 $ 240,000a( 5.33%)0.0533 $400,000 = $ 21,320$ 771,320Finished Goods1,250,000 660,000b(14.67%)0.1467 $400,000 = 58,6801,308,680Cost of Goods Sold...
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Ch4 34 37 solutions - 4-34Proration of overhead.1. Budgeted...

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