The cost accountant for River Rock Beverage Co. estimated that the total cost of factory overhead for the blending department for the next fiscal year beginning February 1 would be $130,000 and the total direct labor costs would be $100,000. During February, actual direct labor cost totaled $12,000 and manufacturing overhead incurred totaled $15,950.

Required:

a.

What is the default factory overhead rate based on direct labor cost?

b.

Journalize the entry to apply factory overhead to February 28 production. Consult the chart of accounts for the exact wording of account titles. CNOW journals do not use lines for spaces or journal explanations. Each line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

C.

What is the balance as of February 28 of the Factory Overhead Mixing Department account?

d.

Does the balance in part (c) represent over-applied or under-applied manufacturing overhead?

CHART OF ACCOUNTS

River Rock Beverage Company.

Ledger

	ASSETS
110	Money
121	accounts receivable
125	billable documents
126	interest receivable
131	Materials
141	I work in the Process Mix Department
142	Department of Work in Process-Filling
151	Factory Overhead Mixing Department
152	Factory overhead filling department
161	Finished products
171	supplies
172	prepaid insurance
173	Prepaid expenses
181	Tierra
191	Factory
192	Accumulated Depreciation-Factory

	PASSIVE
210	Accounts payable
221	utilities to pay
231	Pay
236	interest to pay
251	Salaries to pay

	EQUITY
311	Common actions
340	Retained earnings
351	dividends
390	Income Summary

CHART OF ACCOUNTS

River Rock Beverage Company.

Ledger

	ASSETS
110	Money
121	accounts receivable
125	billable documents
126	interest receivable
131	Materials
141	I work in the Process Mix Department
142	Department of Work in Process-Filling
151	Factory Overhead Mixing Department
152	Factory overhead filling department
161	Finished products
171	supplies
172	prepaid insurance
173	Prepaid expenses
181	Tierra
191	Factory
192	Accumulated Depreciation-Factory

	PASSIVE
210	Accounts payable
221	utilities to pay
231	Pay
236	interest to pay
251	Salaries to pay

	EQUITY
311	Common actions
340	Retained earnings
351	dividends
390	Income Summary

	REVENUE
410	Sales
610	The return on an investment

	BILLS
510	cost of goods sold
520	salary expenses
531	selling expenses
532	insurance costs
533	Public service spending
534	Supply expenses
540	administrative expenses
561	Depreciation Expense-Factory
590	Miscellaneous expenses
710	Interest expenses

X

initial question

to. What is the default factory overhead rate based on direct labor cost?

%

b. Journalize the entry to apply factory overhead to February 28 production. Consult the chart of accounts for the exact wording of account titles. CNOW journals do not use lines for spaces or journal explanations. Each line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

DIARY

ACCOUNTING EQUATION

	DATE	DESCRIPTION	MAIL. REFEREE.	DEBIT	CREDIT	ASSETS	PASSIVE	EQUITY
1
2

C. What is the balance as of February 28 of the Factory Overhead Mixing Department account?

Amount:

	REVENUE
410	Sales
610	The return on an investment

Answer rating: 100% (QA)

a The factory overhead rate is calculated by dividing the total factory overhead cost by the total d... View the full answer