Application of Factory Overhead Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor-hours. The company’s factory overhead budget for 2010 included the followinRg estimate
Application of Factory Overhead Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor-hours. The company’s factory overhead budget for 2010 included the followinRg estimate
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Application of Factory
overhead on the basis of direct labor-hours. The company’s factory overhead budget for 2010 included
the followinRg estimates:
![4-34 Application of Factory Overhead Tomek Company uses a job costing system that applies factory
overhead on the basis of direct labor-hours. The company's factory overhead budget for 2010 included
the following estimates:
Budgeted total factory overhead
Budgeted total direct labor-hours
$568,000
71,000
Chapter 4 Job Costing 113
At the end of the year, the company shows these results:
$582,250
71,500
Actual factory overhead
Actual direct labor-hours
The following amounts of the year's applied factory overhead remained in the various manufacturing
accounts:
Applied Factory Overhead
Work-in-process inventory
Finished goods inventory
Cost of goods sold
$139,000
216,840
200,160
Required
1. Compute the firm's predetermined factory overhead rate for 2010.
2. Calculate the amount of overapplied or underapplied overhead.
3. Prepare a journal entry to transfer the underapplied or overapplied overhead to the Cost of Goods Sold
account (do not use proration).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F350daaf7-ed7f-4461-b140-412aaf4d79e4%2Ff33bb6d0-5acb-49df-9b3e-21860cd52547%2Fdtfq194_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4-34 Application of Factory Overhead Tomek Company uses a job costing system that applies factory
overhead on the basis of direct labor-hours. The company's factory overhead budget for 2010 included
the following estimates:
Budgeted total factory overhead
Budgeted total direct labor-hours
$568,000
71,000
Chapter 4 Job Costing 113
At the end of the year, the company shows these results:
$582,250
71,500
Actual factory overhead
Actual direct labor-hours
The following amounts of the year's applied factory overhead remained in the various manufacturing
accounts:
Applied Factory Overhead
Work-in-process inventory
Finished goods inventory
Cost of goods sold
$139,000
216,840
200,160
Required
1. Compute the firm's predetermined factory overhead rate for 2010.
2. Calculate the amount of overapplied or underapplied overhead.
3. Prepare a journal entry to transfer the underapplied or overapplied overhead to the Cost of Goods Sold
account (do not use proration).
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