Calculator The Winston Company estimates that the factory overhead for the follo

Question

Calculator The Winston Company estimates that the factory overhead for the following year will be $1,071,90 factory overhead should be machine hours, which is estimated to be 39,700 hours. The total machi overhead for the year were $1,473,000 a. Determine the total factory overhead amount applied. (Round to the nearest dollar.) b. Calculate the over- or underapplied amount for the year. Enter the amount as a positive number c. Prepare the journal entry to close factory overhead into Cost of Goods Sold

Explanation / Answer

Budgeted OH = $1071900 / 39700 MH = $27 per MH

(a) Applied at $27 X 54900 = 1482300
(b) Actual Vs Applied = 1473000 – 1482300 = 9300 Overapplied
(c)

General journal

Debit

Credit

Factory OH

9300

Cost of Goods Sold

9300

General journal

Debit

Credit

Factory OH

9300

Cost of Goods Sold

9300

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