Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as

Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,400 machine hours per year, which represents 25,200 units of output. Annual budgeted fixed factory overhead costs are $252,000 and the budgeted variable factory overhead cost rate is $2.10 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 18,600 units, which took 39,400 machine hours. Actual fixed factory overhead costs for the year amounted to $247,200 while the actual variable overhead cost per unit was $2.00.

Based on the information provided above, prepare the appropriate journal entries to record: (a) actual factory overhead costs for the year, (b) the applied factory overhead costs for the year (both variable and fixed), and (c) the total flexible-budget variance and the production volume variance for the period. Assume that the company uses a single account, Factory Overhead, to record both actual and applied factory overhead. Also, assume that the only variable overhead cost was electricity and that actual fixed overhead consisted of depreciation of $152,000 and supervisory salaries of $95,200 Finally, assume that both electricity expense and the supervisory salaries expense have been incurred but not yet paid (i.e., both are current liabilities). (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

image text in transcribedimage text in transcribed

Journal entry worksheet Note: Enter debits before credits. Journal entry worksheet Record the overhead variances using a two-variance approach. Note: Enter debits before credits

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: Greg Shields

1st Edition

1647484286, 978-1647484286

More Books

Students also viewed these Accounting questions

Question

=+Does it make you feel cool?

Answered: 1 week ago