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Creek Company and Fort Company base their predetermined overhead rates on machine hours The following information pertains to the companies’ most recent accounting periods

Creek Company and Fort Company base their predetermined overhead rates on machine hours. The following information pertains to the companies’ most recent accounting periods:

Creek Fort

Actual machine hours …………………………………………12,300……. 19,500

Estimated machine hours……………………………………… 12,000……. 20,000

Actual manufacturing overhead costs………………………$143,800…. .$318,000

Estimated manufacturing overhead costs………………….. $144,000…. $320,000

Required

a. Compute the predetermined overhead rate for each company.

b. Determine the amount of overhead cost that would be applied to work in process for each company and compute the amount of over applied or under applied manufacturing overhead cost for each company.

c. Explain how closing the Manufacturing Overhead account would affect the Cost of Goods Sold account for each company.

Apr 04 2020 View more View Less

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