Question

On March 31, 2019, Dorchester Corporation recorded the following factory overhead costs incurred:

            Factory Manager Salary                  $5,500

            Factory Utilities                                  2,800

            Machinery Deprecation 9,000

            Machinery Repairs 1,800

            Factory Rent     2,000

The overhead application rate is based on direct labor hours.  The preset formula for overhead application estimated that $22,000 would be incurred, and 2,000 direct labor hours would be worked. During March, 650 hours were actually worked on Job Order 3-1 and 1,200 hours were actually worked on Job Order 3-2. Use this information to prepare the March 31 General Journal entries, without explanations, for the: (round any final dollar answers to the nearest whole dollar):

            1. to record the factory overhead costs

            2. the allocation of factory overhead to Job Order 3-1

            3. the allocation of factory overhead to Job Order 3-2

            4. the adjusting entry to dispose of any over or under application of factory overhead

Answer 1

1	Factory overhead a/c Dr	21,100
	To Factory manager salary payable a/c		5,500
	To Factory utilities a/c		2,800
	To Machinery Depreciation a/c		9,000
	To Machinery Repairs a/c		1,800
	To Factory Rent a/c		2,000
2	Standard factory overhead	22000
	Number of direct labour hours	2000
	Factory overhead/labour hour	11
	Cost of Goods sold - Job order 3-1 (650*11) Dr	7150
	To Factory overheads a/c		7,150
3	Cost of Goods sold - Job order 3-2 (1200*11) Dr	13200
	To Factory overheads a/c		13,200
4	Actual overheads	21,100
	Standard overhead	22,000
	Actual hours worked ( 650+1200 )	1850
	Actual overhead / Labour hour	11.41
	Cost of Goods sold - Job order 3-1 Dr (7,416.5-7,150)	267
	Cost of Goods sold - Job order 3-2 Dr (13,692-13200)	492
	To Factory overheads a/c		759