I got the first two parts of this three part question figured out but I can't figure the last part here it is
Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $327,600 for the year, and machine usage is estimated at 126,000 hours.
For the year, $348,788 of overhead costs are incurred and 132,100 hours are used.
Compute the manufacturing overhead rate for the year
and that is 2.60
thats the first question
What is the amount of under- or overapplied overhead at December 31?
and that is $5,328
thats the second question
the last one is
Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
and each have two spots under them
Help thank you
To determine the amount of under- or overapplied overhead at December 31, you need to compare the actual overhead costs incurred with the overhead costs applied based on the machine hours used.
First, let's calculate the overhead applied using the manufacturing overhead rate:
Overhead applied = Machine hours used * Manufacturing overhead rate
Overhead applied = 132,100 hours * $2.60/hour
Overhead applied = $343,260
Next, we compare the overhead applied with the actual overhead costs incurred:
Under- or overapplied overhead = Actual overhead costs incurred - Overhead applied
Under- or overapplied overhead = $348,788 - $343,260
Under- or overapplied overhead = $5,528
Therefore, the amount of under- or overapplied overhead at December 31 is $5,528 (rounded to the nearest dollar).
Now, let's move on to the last question. To prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold, you will use the following accounts:
Account Titles and Explanation:
Debit: Cost of Goods Sold
Credit: Manufacturing Overhead
The adjusting entry will transfer the under- or overapplied overhead from the Manufacturing Overhead account to the Cost of Goods Sold account.
To complete the entry, you need to determine the amount to debit and credit.
Since you have an overapplied overhead of $5,528, you will:
Debit: Cost of Goods Sold - $5,528
Credit: Manufacturing Overhead - $5,528
The entry will be:
Account Titles and Explanation:
Debit: Cost of Goods Sold $5,528
Credit: Manufacturing Overhead $5,528
Please note that the dollar amounts may vary slightly depending on rounding.
To prepare the adjusting entry to assign the under- or overapplied overhead to the cost of goods sold, you will need to debit or credit certain accounts. Based on the information provided, here is the possible adjusting entry:
Account Titles and Explanation Debit Credit
-------------------------------------------------------
Cost of Goods Sold $5,328
Manufacturing Overhead (Underapplied) $5,328
Please note that this is just one possible entry, and the specific accounts may vary based on the company's accounting system. It is always recommended to consult with your accountant or follow the company's accounting policies to ensure accuracy.