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Montenegro Metal Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the
Montenegro Metal Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows: Factory 1 Factory 2 Estimated factory overhead cost for fiscal year beginning March 1 $1,516,700 $1,074.600 Estimated direct labor hours for year 29,850 Estimated machine hours for year 52,300 Actual factory overhead costs for March Actual direct labor hours for March Actual machine hours for March $124,880 $98,910 2,700 4,350 Required: a. Determine the factory overhead rate for Factory 1. b. Determine the factory overhead rate for Factory 2. c. Journalize the Mar. 31 entries to apply factory overhead to production in each factory for March. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries, CNOW journals will automatically indent a credit entry when a credit amount is entered d. Determine the balances of the factory overhead accounts for each factory as of March 31 and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. Enter your answer as a positive number. CHART OF ACCOUNTS Montenegro Metal Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 132 Work in Process 133 Factory Overhead 134 Finished Goods 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation-Factory REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expenses 532 Insurance Expense 533 Utilities Expense 534 Office Supplies Expense 540 Administrative Expenses 560 Depreciation Expense-Factory 590 Miscellaneous Expense 710 Interest Expense 192 Accumulated Depreciation-Factory LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Wages Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends Factory Overhead Rates 710 Interest Expense Factory Overhead Rates a. Determine the factory overhead rate for Factory 1. $ per machine hour b. Determine the factory overhead rate for Factory 2. S per direct labor hour Journal Journal c. Journalize the Mar. 31 entry to apply factory overhead to production in Factory 1 for March. Refer to the chart of accounts for the exact wording of the CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically entry when a credit amount is entered JOURNAL ACCOUNTIN DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABA 1 Now journalize the second Mar. 31 entry to apply factory overhead to production in Factory 2 for March. Refer to the chart of accounts for the exact word titles CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automa credit entry when a credit amount is entered. JOURNAL ACCOUNTIN DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABIL
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