Proration of overhead. (Z. Iqbal, adapted) The Zaf Radiator Company uses a normal-costing system… 1 answer below »

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July 1, 2020
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July 1, 2020

Proration of overhead. (Z. Iqbal, adapted) The Zaf Radiator Company uses a normal-costing system… 1 answer below »

Proration of overhead. (Z. Iqbal, adapted) The Zaf Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2017:

Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows:

1. Compute the budgeted manufacturing overhead rate for 2017.

2. Compute the under- or overallocated manufacturing overhead of Zaf Radiator in 2017. Dispose of this amount using the following:

a. Write-off to Cost of Goods Sold b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold

c. Proration based on the overhead allocated in 2017 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold

3. Which method do you prefer in requirement 2? Explain.

 

 

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Proration of overhead. (Z. Iqbal, adapted) The Zaf Radiator Company uses a normal-costing system… 1 answer below » was first posted on July 1, 2020 at 5:27 am.
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