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 Ã· 80,000 hours = \$60 per machine-hour. 2.Manufacturing overheadunderallocated=Manufacturing overheadincurredâ€“ Manufacturing overheadallocated= \$4,900,000 â€“ \$4,500,000*= \$400,000*\$60 Ã—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 Ã—\$400,000 = \$ 30,0000.125 Ã—\$400,000 = 50,0000.800 Ã—\$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 Ã—\$400,000 = \$ 21,320\$ 771,320Finished Goods1,250,000 660,000b(14.67%)0.1467 Ã—\$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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