24E-i - Horngren'S Financial And Managerial Accounting

Question

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

i. Adjusted for overallocated or underallocated overhead.

 

Step-by-Step Solution

Answer

Date	Particulars	Debit ($)	Credit ($)
	Cost of goods sold	9,650
	Manufacturing overhead		9,650

Step 1: Actual overhead

$$\begin{gathered} \mathbf{Actualoverhead}\mathbf{=}\mathbf{Indirectlabor}\mathbf{+}\mathbf{Indirectmaterial}\mathbf{+}\mathbf{Depreciation}\mathbf{+}\mathbf{Plantinsurance}\mathbf{+}\mathbf{Plantpropertytax} \\ \mathbf{=}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{750}\mathbf{+}\mathbf{\$}\mathbf{5}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{18}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{500}\mathbf{+}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{900} \\ \mathbf{=}\mathbf{\$}\mathbf{32}\mathbf{,}\mathbf{150} \end{gathered}$$

Step 2: Underallocated overhead

$$\begin{gathered} \mathbf{Underallocatedoverhead}\mathbf{=}\mathbf{Actualoverhead}\mathbf{-}\mathbf{Allocatedoverhead} \\ \mathbf{=}\mathbf{\$}\mathbf{32}\mathbf{,}\mathbf{150}\mathbf{-}\mathbf{\$}\mathbf{22}\mathbf{,}\mathbf{500} \\ \mathbf{=}\mathbf{\$}\mathbf{9}\mathbf{,}\mathbf{650} \end{gathered}$$