Conrad Industries Uses a Predetermined Overhead Application Rate of $25

question 46

Essay

Conrad Industries uses a predetermined overhead application rate of $25 per labour hour. A review of the company's accounting records revealed budgeted manufacturing overhead for the period of $700,000, applied manufacturing overhead of $640,900, and overapplied overhead of $12,400.
Required:
A. Determine Conrad's actual labour hours, budgeted labour hours, and actual manufacturing overhead.
B. Present the necessary year-end journal entry to handle the overapplied overhead, assuming that the company allocates over- or underapplied overhead to Cost of Goods Sold.

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Definitions:

Industry Knowledge

involves understanding the dynamics, trends, and key players within a specific sector, contributing to strategic decision-making and competitive advantage.

Transferable Ownership

The ability to legally transfer the title of ownership of property, assets, or a company from one entity to another.

C Corporation

A separate legal and taxable entity created by the state government and owned by an unlimited number of shareholders.

Issue Stock

The process by which a company distributes shares to investors, thereby raising capital.