Lawrence industries manufactures wooden backyard playground equipment. lawrence estimated $ 1 comma 785 comma 000 of manufacturing overhead and $ 2 comma 180 comma 000 of direct labor cost for the year. after the year was over, the accounting records indicated that the company had actually incurred $ 1 comma 700 comma 000 of manufacturing overhead and $ 2 comma 650 comma 000 of direct labor cost.

overhead rate:       0.8188

applied overhead: 2,169,820

overapplication:       469,820

Explanation:

predetermined overhead:

We distribute the overhead over the cost driver. In this case labor cost:

1,785,000 / 2,180,000 = 0.8188

each dollar of labor cost generated 0.8188 of overhead.

applied overhead:

actual labor cost x rate:

2,650,000 x 0.8188 = 2,169,820

actual overhead:        1,700,000

overapplication of overhead:  469,820

we capitalize more cost than actual incurred we should decrease our COGS

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

answer casual models;