Wright Brothers is debating the use of direct labour cost or direct labour hours as the cost allocation base for allocatingmanufacturing overhead. The following information is available for the year ended December 31, 2007.Estimated manufacturing overheadsActual manufacturing overhead costsEstimated direct labour costActual direct labour costEstimated direct labour hoursActual direct labour hours$359,600$340,000$449,500$441,000248,000242,000Using direct labour hours as the cost driver, the journal entry to dispose of the manufacturing overhead variance is:a.Dr. Manufacturing Overhead $10,900 and Cr. WIP $10,900O b. Dr. COGS $10,900 and Cr. Manufacturing Overhead $10,900O . Dr. WIP $10,900 and Cr. Manufacturing Overhead $10,900O d. Dr. Manufacturing overhead $10,900 and Cr. COGS $10,900

Predetermined overhead rate as, $359,600 248,000 DLHs. Predetermined overhead rate = $1.45 per DLH.

Answered: abour cost ur cost abour hours ur hours

Business

Accounting

abour cost ur cost abour hours ur hours

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

Wright Brothers is debating the use of direct labour cost or direct labour hours as the cost allocation base for allocating
manufacturing overhead. The following information is available for the year ended December 31, 2007.
Estimated manufacturing overheads
Actual manufacturing overhead costs
Estimated direct labour cost
Actual direct labour cost
Estimated direct labour hours
Actual direct labour hours
$359,600
$340,000
$449,500
$441,000
248,000
242,000
Using direct labour hours as the cost driver, the journal entry to dispose of the manufacturing overhead variance is:
a.
Dr. Manufacturing Overhead $10,900 and Cr. WIP $10,900
O b. Dr. COGS $10,900 and Cr. Manufacturing Overhead $10,900
O . Dr. WIP $10,900 and Cr. Manufacturing Overhead $10,900
O d. Dr. Manufacturing overhead $10,900 and Cr. COGS $10,900

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