Topic%204%20Tutorial%20Practise%20Solutions.docx - Learning Resource BX2012 \u2013 Tutorial Question Solution set for Topic 4 4-39 Proration of overhead 1

Topic%204%20Tutorial%20Practise%20Solutions.docx - Learning...

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BX2012 – Tutorial Question Solution set for Topic 4 4-39 Proration of overhead. 1. Budgeted manufacturing overhead rate is $4,800,000 ÷ 80,000 hours = $60 per machine-hour. 2. Manufacturing overhead underallocated = Manufacturing overhead incurred Manufacturing overhead allocated = $4,900,000 – $4,500,000* = $400,000 *$60 75,000 actual machine-hours = $4,500,000 a. Write-off to Cost of Goods Sold Account (1) Dec. 31, 2017 Account Balance (Before Proration) (2) Write-off of $400,000 Underallocated Manufacturing Overhead (3) Dec. 31, 2017 Account Balance (After Proration) (4) = (2) + (3) Work in Process Finished Goods Cost of Goods Sold Total $ b. Proration based on ending balances (before proration) in Work in Process, Finished Goods, and Cost of Goods Sold. Account (1) Dec. 31, 2017 Account Balance (Before Proration) (2) Proration of $400,000 Underallocated Manufacturing Overhead (3) Dec. 31, 2017 Account Balance (After Proration) (4) = (2) + (3) Work in Process Finished Goods Cost of Goods Sold Total Learning Resource
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c. Proration based on the allocated overhead amount (before proration) in the ending balances of Work in Process, Finished Goods, and Cost of Goods Sold.
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