Calculate the manufacturing overhead balance at the end

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Reference no: EM13343196

Problem  - Manufacturing Overhead

Pomona Pasteurizing Inc. used a predetermined overhead rate based on direct labor hours, but switched this year to one based on direct machine hours to apply manufacturing overhead to jobs. Production supervisors estimated that 16,715 direct labor hours will be worked during the year. Engineering estimated that the total machine hours for the year would be 66,860. The predetermined overhead rate will be? The company's estimated costs for the next year are:

Cost item

Amount

Depreciation of Factory Equipment

$72,000

Direct Labor

240,000

Direct Materials

36,000

Factory Equipment Lease

144,000

Factory Maintenance

180,000

Indirect labor

72,000

Sales Salaries

174,000

Total Estimated Overhead

918,000



Estimated Labor Hours

16,715

Estimated Machine Hours

66,860

 

At the end of the year, the actual machine hours were 67,200 and the total actual manufacturing overhead was $179,840.

1.     Calculate the Manufacturing Overhead balance at the end of the year and the journal entry to clear this amount if necessary.

 

Reference no: EM13343196

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