Michael Paints Has Two Processes-Coloring Department and Mixing Department

question 3

Essay

Michael Paints has two processes-Coloring Department and Mixing Department. Michael sold 450 gallons on account at $110 per gallon. The total cost of processing was $385,000 for 5,500 gallons of paint. Throughout the year, Michael used a predetermined overhead allocation rate to allocate $80,000 and $90,000 of indirect costs to the Coloring Department and Mixing Department, respectively. The actual overhead costs incurred amounted to $150,000 at the end of the year. What are the journal entries to record the sale of goods and the adjustment for over/underallocated manufacturing overhead at the end of the year if Michael follows a process costing system?

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Definitions:

Assault

An act of physical violence or a threat that places someone in immediate fear of bodily harm or offensive contact.

Bystander

A person who is present at an event or incident but does not take part.

Cognitive Dissonance

The psychological unease felt by someone who simultaneously possesses conflicting beliefs, ideas, or values.

Festinger

A psychologist known for developing the theory of cognitive dissonance, which describes the discomfort felt when holding conflicting beliefs or attitudes.