Harold Corp
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required: Only the letter C.
Please present in good accounting form.
Transcribed Image Text:Problem 3 Predetermined Factory Overhead
Harold Corp uses the job order costing system. Factory overhead is applied te
jobs on the basis of direct labor cost. The following estimates are made at the
beginning of the year:
Fabricating Machining Assembly
300,000
1,200,000
Total
900,000
600,000
1,050,000
1,800,000
2,520,000
Direct Labor
Factory Overhead
270,000
The following are the cost regquired by each department.
Fabricating
9,000
8,400
Machining Assembly
600
Total
Direct Materials
Direct Labor
Factory Overhead
4,200
18,600
?
13,800
28,500
?
1,500
?
At the end of the year, the following are the actual cost data relating to all jobs
processed during the year:
Fabricating Machining Assembly
570,000
630,000
1,080,000
Total
Direct Materials
Direct Labor
Factory Overhead
48,000
324,000
1,260,000
342,000
786,000
252,000
960,000
1,740,000
2,592,000
The company uses plant-wide overhead rate to apply the factory overhead cost
to jobs.
Required:
A. Using plant-wide factory overhead rate
1. Compute the Factory overhead rate.
2. Compute the amount of factory overhead cost applied to the job.
B. Assume the company used separate factory overhead rate for each
department
3. Compute the factory overhead rate for each department.
4. Compute the amount of factory overhead cost applied to the job.
C. Compute the over or under-applied factory overhead for the year (1)
assuming the plant-wide overhead rate is used (2) assuming the
departmental overhead rates are used.
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