On March 31, 2017, Alpha Corporation recorded the following factory overhead costs incurred:

Factory Manager Salary $7,000

Factory Utilities 3,500

Machinery Deprecation 10,000

Machinery Repairs 2,500

Factory Insurance (prepaid) 1,500

The overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $23,000 would be incurred, and 10,000 direct labor hours would be worked. During March, 7,500 hours were actually worked on Job Order A-2 and 3,000 hours were actually worked on Job Order A-3. Use this information to prepare the March 31 General Journal entry to record the factory overhead costs. (round any final dollar answers to the nearest whole dollar) :

Question

Business

Deven Cuevas

19 February, 20:42

On March 31, 2017, Alpha Corporation recorded the following factory overhead costs incurred:

Factory Manager Salary $7,000

Factory Utilities 3,500

Machinery Deprecation 10,000

Machinery Repairs 2,500

Factory Insurance (prepaid) 1,500

The overhead application rate is based on direct labor hours. The preset formula for overhead application estimated that $23,000 would be incurred, and 10,000 direct labor hours would be worked. During March, 7,500 hours were actually worked on Job Order A-2 and 3,000 hours were actually worked on Job Order A-3. Use this information to prepare the March 31 General Journal entry to record the factory overhead costs. (round any final dollar answers to the nearest whole dollar) :

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Answers (1)

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Wiley · Answer 1

The journal entry is shown below:

1. Factory overhead Dr $24,500

To Accumulated depreciation $10,000

To Cash $14,500

(Being the factory overhead cost is recorded)

The factory overhead is

= $7,500 + $3,500 + $10,000 + $2,500 + $1,500

= $24,500

And the remaining balance is credited to cash account