Solutions to Exercises Question 313 15 min Accounting for manufacturing

Solutions to exercises question 313 15 min accounting

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Solutions to Exercises Question 3.13 (15 min) Accounting for manufacturing overhead. 1. Budgeted manufacturing overhead rate €7,000,000 ÷ 200,000 = €35 per machine-hour 2. Work in progress control €6,825,000 Manufacturing overhead allocated (195,000 machine-hours ÷ €35 = €6,825,000) €6,825,000 3. €6,825,000 − €6,800,000 = €25,000 overallocated, an insignificant amount Manufacturing overhead allocated €6,825,000 Manufacturing department overhead control €6,800,000 Cost of goods sold €25,000 Question 3.14 Proration of Overhead (20 minutes) 1. Budgeted manufacturing overhead rate is €4,800,000 ÷ 80,000 = €60 per machine- hour. 2. Manufacturing overhead underallocated = manufacturing overhead incurred manufacturing overhead allocated
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