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

Overhead rate = $22000/2000 = $11 per direct labor hour

No.	Date	Accounts	Debit	Credit
1	Mar. 31, 2019	Factory overhead ($5500 + 2800 + 9000 + 1800 + 2000)	21100
		Salaries payable		5500
		Accounts payable ($2800 + 1800 + 2000)		6600
		Accumulated depreciation-Machinery		9000
2	Mar. 31, 2019	Work in process inventory (650 x $11)	7150
		Factory overhead		7150
3	Mar. 31, 2019	Work in process inventory (1200 x $11)	13200
		Factory overhead		13200
4	Mar. 31, 2019	Cost of goods sold ($21100 - $7150 - $13200)	750
		Factory overhead		750