Question

Storm Concert Promotions Valle Home Builders

Answer 1

Answer:

Storm Concert Promotions

It was overapplied as the amount appliued exceed the actual overhead cost so we decrease the cost of good.

manufacturing overhead   3,200 debit

            COGS                         3,200 credit

Valle Home Builders

It was underapplied as the amount applied was below the actual overhead cost. We must increase the cost of our good sold to recognize the extra cost.

COGS                                 1,200 debit

manufacturing Overhead       1,200 credit

Explanation:

Storm Concert Promotions

Actual indirect materials costs     22,000

Actual indirect labor costs            46,000

Other overhead costs                    17,000  

Total overhead                             85,000

Overhead applied                        88,200

Overapplied overhead                   3,200

Valle Home Builders                

Actual indirect materials costs  12,500

Actual indirect labor costs        46,500

Other overhead costs                47,000  

Total overhead                         106,000

Overhead applied                   105,200

Overhead underapplied             1,200