Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor
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Question:
Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor hours. The company’s factory overhead budget for the current year included the following estimates:
Budgeted total factory overhead | $568,000 |
Budgeted total direct labor hours | 71,000 |
At the end of the year, the company shows these results:
Actual factory overhead | $582,250 |
Actual direct labor hours | 71,500 |
Required
Compute the firm’s predetermined factory overhead rate for the current year.
Calculate the amount of overapplied or underapplied overhead.
Prepare a journal entry to transfer the underapplied or overapplied overhead to the Cost of Goods Sold account.
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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