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Q. 11SE

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 940

Short Answer

Justice Company’s Manufacturing Overhead account is given below. Use this informationto prepare the journal entry to adjust for overallocated or underallocatedoverhead.

Manufacturing overhead

148000147000

Date

Particulars

Debit ($)

Credit ($)

Cost of goods sold

1,000

Manufacturing overhead

1,000

See the step by step solution

Step by Step Solution

Step 1: Overheads

Overhead expenses means the cost that are not related to labor, direct material, or production.They are more static costs and pertains to general business of the company.

Step 2: Underallocated overhead amount

The manufacturing overhead of the company is underallocated because the allocated amount of overhead is less than the actual overhead by the amount of $1,000.

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