Magoro,Inc

question 32

Essay

Magoro,Inc.has two processes-Coloring Department and Mixing Department.The company 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,the company 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 the company follows a perpetual inventory system and process costing?

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Definitions:

Negative Externalities

Costs that are not reflected in the market price, caused by the production or consumption of goods and services, and borne by society rather than the producers or consumers.

Earmarks

Provisions within legislation that allocate specific funds to certain projects, often without a competitive bidding process.

Federal Government Legislation

Laws and regulations created and enacted by the national government of a country.

Authorized

Officially given permission or power to do something.