Question

Chart of Accounts Factory Overhead General Journal Instruction The Winston Company estimates that the factory overhead for the following year will be 5716,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 39,800 hours. The total machine hours for the year were 54,400 hours. The actual factory Overhead for the year was 993000 Required aj Determine the total factory overhead amount oled Dj Calculate the replied or under led amount for the year. Enter the amount as poteva Propor the journal entry to close Factory Overhead into cost of Goods Sold. Refer to the Chart of Account for each wording of account hop В

Answer 1

Answer:
Predetermined Overhead rate               = Estimated Factory overhead / Estimated machine Hours               =   $ 716,400 / 39,800 hours	$ 18 per MH
(a)
Total Factory Overhead amount applied               = Predetermined Overhead rate x Machine Hours               =    $ 18 x 54,400 hours
Total Factory Overhead applied	$ 979,200
(b)
Over/ under applied Overhead              = Actual Factory Overhead (-) Applied Factory Overhead              =    $ 993,000 (-) $ 979,200              =   $ 13,800 (underapplied )
Factory Overhead Underapplied amount by $ 13,800
(c )
Accounting titles and Explanations	Debit	Credit
Cost of Goods Sold	$ 13,800
Factory Overhead (or )Manufacturing Overhead		$ 13,800
(To record the closing of Factory Overhead to Cost of Goods sold )