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Renteria Company: Compute manufacturing overhead

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E20-5

Renteria Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $305,000 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.

Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 10.50.)
$

What is the amount of under- or overapplied overhead at December 31?
$

Assuming the under- or over- applied overhead for the year is not allocated to inventory accounts, prepare the adjusting entry to assign the amount to cost of goods sold.
Account/Description Debit Credit

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Solution Summary

The solution computes the needed amounts and then gives you the journal entry.

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