ACC 560 MART Start With a Dream /acc560mart.com ACC 560 MART Start With a Dream /acc560mart.com | Page 7

Chapter 2: Job Order Costing and Chapter 3: Process Costing
E2-5
Ikerd Company applies manufacturing overhead to jobs on the basis of
machine hours used. Overhead costs are expected to total $300,000 for
the year, and machine usage is estimated at 125,000 hours. For the
year, $322,000 of overhead costs are incurred and 130,000 hours are
used. Instructions
(a) Compute the manufacturing overhead rate for the year
(b) What is the amount of under- or over applied overhead at
December 31?
(c) Prepare the adjusting entry to assign the under- or over applied
overhead for the year to cost of goods sold.
E2-7
Crawford Corporation incurred the following transactions.
1. purchased raw materials on account $46,300.
2. Raw materials of $36.000 were requisitioned to the factory. An
analysis of the materials
3. Factory labor costs incurred were $59,900, of which $51,000
pertained to factory wages payable and $8,900 pertained to employer
payroll taxes payable.
4. Time tickets indicated that $54,000 was direct labor and $5,900 was
indirect labor.