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The cost accountant for River Rock Beverage Co
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be $656,400, and total direct labor costs would be $547,000. During February, the actual direct labor cost totaled $47,000, and factory overhead cost incurred totaled $58,650.
a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals.
b. Journalize the entry to apply factory overhead to production for February.
Work in Process-Blending Department _____
Factory Overhead-Blending Department ______
c. What is the February 28 balance of the account Factory Overhead—Blending Department?
Amount: $_____
Expert Solution
a) Computation of Predetermined Factory Overhead Rate based on Direct Labor Cost:
Predetermined Factory Overhead Rate = Estimated Total Factory Overhead Cost/Estimated Total Direct Labor Cost
= $656,400 / $547,000
= 120% of Direct labour cost
b) Journalize the entry to apply factory overhead to production for February:
c) Computation of February 28 balance of the account Factory Overhead—Blending Department:
Amount = $58,650-$56,400 = $2,250
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