Kei Products Uses a Predetermined Overhead Application Rate of $18

question 27

Essay

Kei Products uses a predetermined overhead application rate of $18 per labor hour. A review of the company's accounting records revealed budgeted manufacturing overhead for the period of $621,000, applied manufacturing overhead of $590,400, and overapplied overhead of $11,900.
Required:
A. Determine Kei's actual labor hours, budgeted labor hours, and actual manufacturing overhead.
B. Present the necessary year-end journal entry to handle the overapplied overhead, assuming that the firm allocates over- or underapplied overhead to Cost of Goods Sold.

---

Definitions:

P-value

The chance of witnessing outcomes in a test that are as or more extreme than what was actually seen, assuming that the null hypothesis is true.

Significance Level

A threshold set by researchers in hypothesis testing that determines the probability of rejecting a true null hypothesis, often denoted by alpha (α).

Rejection Region

The region in the sampling distribution of a statistic that leads to the rejection of the null hypothesis.

Test Statistic

A value calculated from sample data during a hypothesis test, used to decide whether to reject the null hypothesis.