Question

The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be $677,350, and total direct labor costs would be $589,000. During February, the actual direct labor cost totaled $51,000, and factory overhead cost incurred totaled $61,000.

a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals.
fill in the blank d7514cfa0025fd3_1 %

b. Journalize the entry to apply factory overhead to production for February.

c. What is the February 28 balance of the account Factory Overhead—Blending Department?

Amount:
Debit or Credit?

d. Does the balance in part (c) represent overapplied or underapplied factory overhead?

Answer 1

1.

Estimated Overhead costs	/	Estimated Direct labor costs	=	Overhead rate
$6,77,350	/	$5,89,000	=	115%

2.

Particulars	Debit	Credit
Work in process-Blending (51000*115%)	$58,650
To Factory Overhead		$58,650

3.

Factory Overhead
Actual Overhead	$61,000	Applied	$58,650
Balance (Under-applied)	$2,350

balance = $2350 Debit

4.

the balance in part (c) represent  underapplied factory overhead.