Selwyn's Service applied overhead on the basis of direct labor costs during the current year.Overhead applied was $16,500.Actual overhead incurred was $17,200.
A. Prepare a journal entry to remove this difference assuming that it is not material.
B. Instead, assume actual overhead incurred was only $24,000. Describe (without computations) the alternative procedure that Selwyn might use to record this material difference.

Question

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The Answer of Selwyn's Service applied overhead on the basis of direct labor costs during the current year.Overhead applied was $16,500.Actual overhead incurred was $17,200.
A. Prepare a journal entry to remove this difference assuming that it is not material.
B. Instead, assume actual overhead incurred was only $24,000. Describe (without computations) the alternative procedure that Selwyn might use to record this material difference.

Selwyn's Service Applied Overhead on the Basis of Direct Labor