Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Aspen Company estimates its manufacturing overhead to be
$512,000 and its direct labor costs to be $512,000 for year 2. Aspen
worked three jobs for the year. Job 2-1, which was sold during year
2, had actual direct labor costs of $220,995. Job 2-2, which was
completed, but not sold at the end of the year, had actual direct
labor costs of $433,805. Job 2-3, which is still in work-in-process
inventory, had actual direct labor costs of $163,700. The actual
manufacturing overhead for year 2 was $827,400. Manufacturing
overhead is applied on the basis of direct labor costs.
Required:
Prepare an entry to allocate over-or underapplied overhead to Work
in Process, Finished Goods, and Cost of Goods Sold.
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Transcribed Image Text:Aspen Company estimates its manufacturing overhead to be $512,000 and its direct labor costs to be $512,000 for year 2. Aspen worked three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $220,995. Job 2-2, which was completed, but not sold at the end of the year, had actual direct labor costs of $433,805. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of $163,700. The actual manufacturing overhead for year 2 was $827,400. Manufacturing overhead is applied on the basis of direct labor costs. Required: Prepare an entry to allocate over-or underapplied overhead to Work in Process, Finished Goods, and Cost of Goods Sold.
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