uzadis Company makes furniture using the latest automated technology. The company uses a ob-order costing system and applies manufacturing overhead cost to products based on machine-hours. The predetermined overhead rate was based on a cost formula that estimates -592,000 of total manufacturing overhead for an estimated activity level of 74,000 machine- ours. During the year, a large quantity of furniture on the market caused Luzadis to cut production and uild inventories. The company provided the following data for the year: Machine-hours Manufacturing overhead cost Inventories at year-end: Raw materials Work in process (includes overhead applied of $37,520) Finished goods (includes overhead applied of $101,840) Cost of goods sold (includes overhead applied of $396,640) Required: 1. Compute the underapplied or overapplied overhead. 2. Assume the company closes underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume the company allocates underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 67,000 $ 551,000 Compute the underapplied or overapplied overhead. $ 13,000 $ 139,300 $ 378,100 $ 1,472,600

Mooresville Corporation manufactures reproductions of eighteenth-century, classical-style furniture. It uses a job costing system that applies factory overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $1,426,000, and management budgeted 92,000 direct labor hours. Mooresville had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of August. These transactions were recorded during August: Purchased 6,000 square feet of oak on account at $26 per square foot. Purchased 150 gallons of glue on account at $36 per gallon (indirect material). Requisitioned 4,200 square feet of oak and 41 gallons of glue for production. Incurred and paid payroll costs of $208,900. Of this amount, $56,000 were indirect labor costs; direct labor personnel earned $22 per hour. Paid factory utility bill, $16,930 in cash. August’s insurance cost for the manufacturing property and equipment was $4,000. The premium had been paid in March. Incurred $9,150…

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Kingsford Furnishings Company manufactures designer furniture. Kingsford Furnishings uses job order costing. Balances on April 1 from the materials ledger are as follows: Fabric $58, 300 Polyester filling 30,000 Lumber 58, 800 Glue 9,950 The materials purchased during April are summarized from the receiving reports as follows: Fabric $820,000 Polyester filling 315,000 Lumber 555,000 Glue 80,000 Details The glue is not a significant cost, so it is treated as indirect materials (factory overhead). Journalize the entry to record the purchase of materials in April. Journalize the entry to record the requisition of materials in April.

McClellan Recreation manufactures and sells two models of paddle boards: Starter and Pro. The Starter model is a basic board used for instruction and purchased by novices. The Pro model is made with premium materials and comes with several accessories. The boards are produced to order, and there are no inventories at the end of the year. The cost accounting system at McClellan allocates overhead to products based on direct labor cost. Overhead in year 1, which just ended, was $2,536,800. Data on units sold for year 1 along with the unit sales price and unit direct costs for the two models follow: Sales price per unit Direct materials per unit Direct labor per unit Required: a. Compute product line profits or loss for the Starter model and the Pro model for year 1. b. A study of overhead shows that without the Starter model, overhead would fall to $1,442,000. Assume all other revenues and costs would remain the same for the Pro model in year 2. Compute product line profits for the Pro…