Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be $549,600, and total direct labor costs would be $458,000. During February, the actual direct labor cost totaled $39,000, and factory overhead cost incurred totaled $48,650.
a. What is the predetermined factory overhead
rate based on direct labor cost? Enter your answer as a whole
percent not in decimals.
%
b. Journalize the entry to apply factory overhead to production for February.
c. What is the February 28 balance of the account Factory Overhead—Blending Department?
Amount: | $ |
Debit or Credit? |
d. Does the balance in part (c) represent
overapplied or underapplied factory overhead?
A) predetermined overhead rate = Estimated overhead/Estimated allocation base
= 549,600/458,000
= 120% of direct labor cost
B)
Work in Process - blending | 46,800 | |
Factory Overhead - Blending | 46,800 | |
(39,000*120%) |
C)
1,850 debit
(48,650-46,800)
D)
Underapplied
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