The chief cost accountant for Voltaire Beverage Co estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $160,000 and total direct labor costs would be $100,000 During May, the actual direct labor cost totaled $13,500 and factory overhead cost incurred totaled $21,950 Required a What is the predetermined factory overhead rate based on direct labor cost b On May 31, journalize the entry to apply factory overhead to production 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 c What is the May 31 balance of the account Factory Overhead Blending Department d Does the balance in part c represent over or underapplied factory overhead Chart of Accounts CHART OF ACCOUNTS Voltaire Beverage Co General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 141 Work in Process Blending Department 142 Work in Process Filling Department 151 Factory Overhead Blending Department 152 Factory Overhead Filling Department 161 Finished Goods 171 Supplies 172 Prepaid Insurance 173 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation Factory LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expense 532 Insurance Expense 533 Utilities Expense 534 Supplies Expense 540 Administrative Expense 561 Depreciation Expense Factory 590 Miscellaneous Expense 710 Interest Expense Starting Question a What is the predetermined factory overhead rate based on direct labor cost Journal b On May 31, journalize the entry to apply factory overhead to production 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 PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 Final Questions c What is the May 31 balance of the account Factory Overhead Blending Department Amount Debit or credit d Does the balance in part c represent over or underapplied factory overhead

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The chief cost accountant for Voltaire Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May

The chief cost accountant for Voltaire Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $160,000 and total direct labor costs would be $100,000. During May, the actual direct labor cost totaled $13,500 and factory overhead cost incurred totaled $21,950.

Required:

a.	What is the predetermined factory overhead rate based on direct labor cost?
b.	On May 31, journalize the entry to apply factory overhead to production. 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.
c.	What is the May 31 balance of the account Factory Overhead-Blending Department?
d.	Does the balance in part c represent over- or underapplied factory overhead?

Chart of Accounts

CHART OF ACCOUNTS

Voltaire Beverage Co.

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
125	Notes Receivable
126	Interest Receivable
131	Materials
141	Work in Process-Blending Department
142	Work in Process-Filling Department
151	Factory Overhead-Blending Department
152	Factory Overhead-Filling Department
161	Finished Goods
171	Supplies
172	Prepaid Insurance
173	Prepaid Expenses
181	Land
191	Factory
192	Accumulated Depreciation-Factory

	LIABILITIES
210	Accounts Payable
221	Utilities Payable
231	Notes Payable
236	Interest Payable
251	Wages Payable

	EQUITY
311	Common Stock
340	Retained Earnings
351	Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Selling Expense
532	Insurance Expense
533	Utilities Expense
534	Supplies Expense
540	Administrative Expense
561	Depreciation Expense-Factory
590	Miscellaneous Expense
710	Interest Expense

Starting Question

a. What is the predetermined factory overhead rate based on direct labor cost?

Journal

b. On May 31, journalize the entry to apply factory overhead to production. 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.

PAGE 10

JOURNAL

ACCOUNTING EQUATION