Parker manufacturing estimates Parker Manufacturing estimates factory overhead costs of $600,000and 30,000 direct labor hours for the upcoming year. At year-end,actual direct labor hours worked were 28,000 and actual factoryoverhead was $575,000. Calculate the amount of overapplied orunderapplied overhead.

Step 1: Definition of Overapplied or Underapplied OverheadOverapplied overhead occurs when the…

Answered: Parker Manufacturing estimates factory…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...

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If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
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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Parker Manufacturing estimates factory overhead costs of $600,000 and 30,000 direct labor hours for the upcoming year. At year-end, actual direct labor hours worked were 28,000 and actual factory overhead was $575,000. Calculate the amount of overapplied or underapplied overhead.