Bostock's Building Blocks uses number of minutes in its firing oven to allocate overhead costs to products. In a typical month, 5,000 firing minutes are expected, and average monthly overhead costs are $3,500. During January, 4,800 firing minutes were used and total overhead costs were $2,750. Required: Compute Bostock's predetermined overhead rate and the amount of applied overhead for January. Round your answers to the nearest cent.

Bostock's Building Blocks uses number of minutes in its firing oven to allocate overhead costs to products. In a typical month, 5,000 firing minutes are expected, and average monthly overhead costs are $3,500. During January, 4,800 firing minutes were used and total overhead costs were $2,750. Required: Compute Bostock's predetermined overhead rate and the amount of applied overhead for January. Round your answers to the nearest cent.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

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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 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
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