Winston Company estimates that the factory overhead for the following year will be $653,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 36,300 hours. The total machine hours for the year were 55,000 hours. The actual factory overhead for the year was $984,000. Required: (a) Determine the total factory overhead amount applied. (b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values. (c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the Chart of Accounts for exact wording of account titles.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
| (a) Determine the total factory overhead amount applied. | |
| (b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values. | |
| (c) Prepare the |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
