Gibson Company Uses a Predetermined Overhead Rate of $5 Per

question 83

Essay

Gibson Company uses a predetermined overhead rate of $5 per machine hour to apply overhead.During the year,32,500 machine hours were worked.Actual manufacturing overhead cost for the year was $187,500.Company records showed the following account balances at the end of the year:
$\begin{array}{lr}\text { Materials } & \$ 22,500 \\\text { Work in process } & 37,500 \\\text { Finished goods } & 50,000 \\\text { Cost of goods sold } & 112,500\end{array}$
a.Determine the amount of underapplied or overapplied overhead.
b.Assuming the amount of underapplied or overapplied overhead is material,determine underapplied or overapplied overhead that would be allocated to the following accounts if the allocation is made using ending account balances:
Work in Process
Finished Goods
Cost of Goods Sold
c.Assuming the amount of underapplied or overapplied overhead is material,calculate the new balance of the following accounts after underapplied or overapplied overhead has been allocated:
Work in Process
Finished Goods
Cost of Goods Sold
d.Determine the balance of Cost of Goods Sold if underapplied or overapplied overhead is immaterial.

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Definitions:

Bed Rest

A medical recommendation for patients to stay in bed to aid in the recovery process from an illness, injury, or surgical procedure.

Nursing Diagnoses

A clinical judgment about individual, family, or community experiences and responses to actual or potential health problems or life processes used in nursing.

Care Plans

Documented approaches tailored for individual patient care, outlining specific health care needs and interventions.

Priority Diagnoses

Identifying the most critical and immediate health issues that require urgent attention and intervention for a patient.