Question

Calculator The Winston Company estimates that the factory overhead for the following year will be $900,800. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 28.400 hours. The total machine hours for the year were 54,100 hours. The actual factory overhead for the year was $1,755,000. Enter the amount as a positive number. a. Determine the total factory overhead amount applied. (Round to the nearest dollar) b. Calculate the over or underapplied amount for the year. Prepare the journal entry to dose factory overhead into cost of Goods Sold Pinou 6 6 00 P T G H F J K K L PES B N M M

Answer 1

a.

Estimated factory overhead = $908,800

Estimated machine hours = 28,400

Predetermined overhead rate = Estimated factory overhead/ Estimated machine hours

= 908,800/28,400

= $32 per machine hour

total factory overhead applied = Actual machine hours x Predetermined overhead rate

= 54,100 x 32

= $1,731,200

b.

Actual factory overhead = $1,755,000

Under applied factory overhead = Actual factory overhead- total factory overhead applied

= 1,755,000-1,731,200

= $23,800

c.

General journal	Debit	Credit
Cost of goods sold	$23,800
Factory overhead		$23,800

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