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b. Assume that in 2014, actual Overhead Actual OverheadApplied Overhead OH in WIP Credit Balance- Overapplied Add to ending COGS Subract from ending
Expert Answer
| Answer a. | ||||
| Predetermined Overhead Rate = $12,000,000 (Estimated Overhead) / 20,000,000 Truck Miles | ||||
| Predetermined Overhead Rate = $0.60 per truck mile. | ||||
| Answer b. | ||||
| Applied Overhead – 24,000,000 truck Miles X $0.60 | 14,400,000 | |||
| Actual Overhead | 15,000,000 | |||
| Underapplied Overhead | 600,000 | |||
| Answer c. | |||
| Journal Entry | |||
| Date | Particulars | Dr. Amt. | Cr. Amt. |
| 1 | Cost of Goods Sold Dr. | 600,000 | |
| To Manufacturing Overhead | 600,000 | ||
