Question

MANAGERIAL ACCOUNTING Brown Brothers is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended December 31, 20x7: Estimated manufacturing overheads: $359,600 Actual manufacturing overhead costs: $340,000 Estimated direct labor cost: $449,500 Actual direct labor cost: $441,000 Estimated direct labor hours: 248,000 Actual direct labor hours: 242,000 Using direct labor hours as the cost driver, the journal entry to dispose of the manufacturing overhead variance is: Select one: a) Dr: Manufacturing overhead $10,900 and Cr: COGS $10,900 b) Dr: COGS $10,900 and Cr: Manufacturing Overhead $10,900 c) Dr: WIP $10,900 and Cr: Manufacturing Overhead $10,900 d) Dr: Manufacturing Overhead $590,100 and Cr: COGS $590,100

          MANAGERIAL ACCOUNTING
Brown Brothers is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended December 31, 20x7:

Estimated manufacturing overheads: $359,600
Actual manufacturing overhead costs: $340,000
Estimated direct labor cost: $449,500
Actual direct labor cost: $441,000
Estimated direct labor hours: 248,000
Actual direct labor hours: 242,000

Using direct labor hours as the cost driver, the journal entry to dispose of the manufacturing overhead variance is:

Select one:
a) Dr: Manufacturing overhead $10,900 and Cr: COGS $10,900
b) Dr: COGS $10,900 and Cr: Manufacturing Overhead $10,900
c) Dr: WIP $10,900 and Cr: Manufacturing Overhead $10,900
d) Dr: Manufacturing Overhead $590,100 and Cr: COGS $590,100

Added by Christopher H.

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