Factory Overhead Rate, Entry for Applying Factory Overhead, andFactory Overhead Account BalanceThe cost accountant...Factory...

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Accounting

Factory Overhead Rate, Entry for Applying Factory Overhead, andFactory Overhead Account Balance
The cost accountant for Kenner Beverage Co. estimated that totalfactory overhead cost for the Blending Department for the comingfiscal year beginning May 1 would be $638,400, and total directlabor costs would be $532,000. During May, the actual direct laborcost totaled $46,000, and factory overhead cost incurred totaled$57,400.
a. What is the predetermined factory overheadrate based on direct labor cost? Enter your answer as a wholepercent not in decimals.
%
b. Journalize the entry to apply factoryoverhead to production for May.
c. What is the May 31 balance of the accountFactory Overhead—Blending Department?
Amount: $
Debit or Credit?
d. Does the balance in part (c) representoverapplied or underapplied factory overhead?

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Ans:

Predetermined factory overhead rate = $638400/$532000 = 120% of Direct Labour cost

Ans: Actual Direct labour cost is $46000*1.20=$55200

Journal Entry

Work in Process-Blending Department $55200

Factory Overhead-Blending Department $55200

C Ans:

May 31 balance = $57400-$55200 = $2200 debit balance

D Ans:

Underapplied overhead ( Because of debit balance ,,If it is credit balance then over applied)

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In: AccountingFactory Overhead Rate, Entry for Applying Factory Overhead, andFactory Overhead Account BalanceThe cost accountant...Factory Overhead Rate, Entry for Applying Factory Overhead, andFactory Overhead Account BalanceThe cost accountant for Kenner Beverage Co. estimated that totalfactory overhead cost for the Blending Department for the comingfiscal year beginning May 1 would be $638,400, and total directlabor costs would be $532,000. During May, the actual direct laborcost totaled $46,000, and factory overhead cost incurred totaled$57,400.a. What is the predetermined factory overheadrate based on direct labor cost? Enter your answer as a wholepercent not in decimals.%b. Journalize the entry to apply factoryoverhead to production for May.c. What is the May 31 balance of the accountFactory Overhead—Blending Department?Amount:$Debit or Credit?d. Does the balance in part (c) representoverapplied or underapplied factory overhead?