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    Mar 31, 2007, 07:32 AM
    Factory overhead cost
    Hello
    I need someone to help me figure this out. Please I have started am I doing it correctly?

    The estimated total factory overhead cost and total machine hours for Department 40 for the current year are $225,000 and 56,250 respectively. During January, the first month of the current year, actual machine hours used totaled 5,100 and factory overhead cost incurred totaled $19,800.

    a.) Determine the factory overhead rate based on machine hours. 225,000 / 56,250 = $4 factory overhead rate
    b.) Present the entry to apply factory overhead to production in Department 40 for January
    Work in Process 225,000
    Factory Overhead 225,000
    Factory overhead applied to jobs
    According to the predetermined
    Overhead rate
    c. What is the balance of factory overhead - Department 40 at January 31?
    Account Factory Overhead Account No.
    Balance
    Date Item post Ref. Debit Credit Debit Credit
    Dec. 31 Balance
    Jan. 1 Factory Overhead
    Cost applied... 225,000………………………………..

    Factory overhead... 20,400
    Cost incurred...
    d. Does the balance of factory overhead - Department 40 at january 31 represent overappplied or underapplied factory overhead?

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