6. Cards by Shannon allocates factory overhead based upon hours used by a piece ofequipment. At the beginning of the period, the company estimates factory overhead tobe $25,000 and expects the equipment to be used for 4,000 hours. During the periodJob 22 requires 1,900 hours of use of the equipment, Job 23 requires 1,700 hours, andJob 24 requires 100 hours. As of March 31, actual indirect costs include: $4,000 forindirect materials, $9,100 for indirect labor, $6,000 for utilities, and $5,200 forequipment depreciation.a. Prepare the journal entry to record the costs considered factory overhead. b. Calculate the predetermined factory overhead rate. 3 c. Prepare the journal entry required to apply the factory overhead to the jobs atthe end of the month. 7. Is the factory overhead from Exercise 6 overapplied or underapplied? If Cards byShannon has a March 31 fiscal year-end, prepare the journal entry required to disposeof the balance in Factory Overhead. 8. Cards by Shannon completed Job 22 on April 5 and Job 23 on April 6. Use theinformation in Exercises 4-8 to prepare the journal entries required to transfer the jobs.Job 22 also incurred $7,900 of direct materials and $1,000 of direct labor costs, and Job23 incurred $9,000 of direct materials and $900 of direct labor costs previously.
Job 22 Job 23 Direct materials $ 8,100 $ 9,800 Direct labor 1,100 1,120 Factory overhead 11,875 10,625 Total $21,075 $21,545 4 Chapter 17 9. On June 12, 2015, the Raw Materials account has a balance of $350. Michael’s CampingSupply receives the following: materials requisition for Job 81 for $120, Receiving ReportNo. 99 for $790, Receiving Report No. 100 for $900, and materials requisition for Job 83for $185. Prepare the journal entries to record the transactions if the company pays forthe materials on credit. Also determine the balance of Raw Materials at the end of theday.
You've reached the end of your free preview.
Want to read all 10 pages?
- Spring '08
- Managerial Accounting, Supply chain management terms, Factory Overhead