a.
For factory 1
Estimated factory overhead cost = $654,780
Estimated machine hours = 15,590
Factory overhead rate = Estimated factory overhead cost /Estimated machine hours
= 654,780/15,590
= $42 per machine hour
b.
For factory 2
Estimated factory overhead cost = $1,100,500
Estimated direct labor hours = 15,500
Factory overhead rate = Estimated factory overhead cost /Estimated direct labor hours
= 1,100,500/15,500
= $71 per direct labor hours
c.
Factory overhead applied in factory 1 = Actual machine hours x Factory overhead rate
= 1,220 x 42
= $51,240
Factory overhead applied in Factory 2 = Actual direct labor hours x Factory overhead rate
= 1,400 x 71
= $99,400
Factory | General Journal | Debit | Credit |
Factory 1 | Work in process inventory | $51,240 | |
Factory overhead | $51,240 | ||
Factory 2 | Work in process inventory | $99,400 | |
Factory overhead | $99,400 |
d.
For factory 1
Actual factory overhead cost = $52,520
Applied factory overhead cost = $51,240
Under applied factory overhead = Actual factory overhead cost - Applied factory overhead cos
= 52,520-51,240
= $1,280
For factory 2
Actual factory overhead cost = $95,420
Applied factory overhead cost = $99,400
Over applied factory overhead = Applied factory overhead cost- Actual factory overhead cost
= 99,400-95,420
= $3,980
Factory 1 | $1,280 | Under applied |
Factory 2 | $3,980 | Over applied |
Kindly comment if you need further assistance. Thanks‼!
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