Asked by ANGELITA BROOKS on May 22, 2024
Verified
The estimated total factory overhead cost and total machine hours for Department 40 for the current year are $250,000 and 56,250, respectively. During January, the first month of the current year, actual machine hours used totaled 5,100 and factory overhead cost incurred totaled $22,000.
(a)Determine the factory overhead rate based on machine hours.
(b)Prepare the journal entry to apply factory overhead to production in Department 40 for January.
(c)What is the balance of Factory Overhead-Department 40 at January 31?
(d)Does the balance of Factory Overhead-Department 40 at January 31 represent over- or underapplied factory overhead?Round the factory overhead rate to the nearest cent.
Factory Overhead Rate
A measure used to assign the total indirect manufacturing costs to individual units of production, often based on a standard costing system or activity-based costing.
Machine Hours
A measure of the total time that machines are operating during a specific period.
Factory Overhead
Refers to the indirect costs associated with manufacturing, excluding direct materials and direct labor.
- Compute and implement the rates of overhead application within manufacturing environments.
- Learn the process of transferring costs between departments and to finished goods.
Verified Answer
Learning Objectives
- Compute and implement the rates of overhead application within manufacturing environments.
- Learn the process of transferring costs between departments and to finished goods.
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