The Company​ (ROW) produces a line of​ non-motorized boats. ROW uses a​ normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following data are for ​: Budgeted manufacturing overhead cost $125,000
Budgeted direct manufacturing labor cost $250,000
Actual manufacturing overhead cost $117,000
Actual direct manufacturing labor cost $228,000

Inventory balances on December 31, 2014, were as follows:

Account Ending balance 2014 Direct manufacturing labor cost in ending balance

Work in process $50,700 $20,520
Finished goods 245,050 59,280
Cost of goods sold 549,250 148,200

Required:

1. Calculate the predetermined overhead rate.
2. Compute the amount of under- or overapplied manufacturing overhead.
3. Calculate the ending balances in work in process, finished goods, and cost of goods sold if under- or overapplied manufacturing overhead is as follows:

a. Written off to cost of goods sold
b. Prorated based on ending balances (before proration) in each of the three accounts

See

Explanation:

1. Predeterminer overhead

= Budgeted manufacturing overhead rate / Budgeted direct material labor cost

= 125,000/250,000

= 50%

2. Under or over allocated manufacturing overhead

= Actual manufacturing cost - Allocated manufacturing cost

= $117,000 - (50% × $228,000)

= $117,000 - $114,000

= $3,000

Over allocated manufacturing overhead = $3,000

It therefore means that the manufacturing overhead allocated is higher than the actual manufacturing cost hence it is over allocated.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

answer; 33,000;