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Entries for Direct Labor and Factory Overhead

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:

Job 201	$3,610
Job 202	1,800
Job 203	1,420
Job 204	2,660
Factory supervision	1,230

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $20 per direct labor hour. The direct labor rate is $13 per hour.

If required, round final answers to the nearest dollar.

a. Journalize the entry to record the factory labor costs. If an amount box does not require an entry, leave it blank.

b. Journalize the entry to apply factory overhead to production for November.

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Predetermined Factory Overhead Rate

Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:

Disposable supplies		$367,200
Depreciation expense		66,200
Utilities		38,500
Nurse salaries		551,400
Technician wages		180,700
	Total operating room overhead	$1,204,000

The overhead costs will be assigned to procedures based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.

a. Calculate the estimated number of operating room hours for the year.

b. Determine the predetermined operating room overhead rate for the year. $ per hour

c. Bill Harris had a 4-hour procedure on January 22. How much operating room overhead would be charged to her procedure, using the rate determined in part (b)? $

d. During January, the operating room was used 194 hours. The actual overhead costs incurred for January were $81,600. Determine the overapplied operating overhead or underapplied operating overhead for the period. Enter your answer as a positive number. $