Chapter 3, Problem 4E

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.

1. a. What is the predetermined factory overhead rate based on direct labor cost?
2. b. Journalize the entry to apply factory overhead to production for February.
3. c. What is the February 28 balance of the account Factory Overhead—Blending Department?
4. d. Does the balance in part (c) represent over- or underapplied factory overhead?