Factory Overhead Rate

Factory overhead rate, entry for applying factory overhead, and factory overhead account balance

The cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $210,000, and total direct labor costs would be $150,000. During May, the actual direct labor cost totaled $12,000, and factory overhead cost incurred totaled $17,100.

Required:

a.	What is the predetermined factory overhead rate based on direct labor cost?
b.	Journalize the entry to apply factory overhead to production for May 31. Refer to the Chart of Accounts for exact wording of account titles.
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 ACCOUNTSKenner Beverage Co.General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
125	Notes Receivable
126	Interest Receivable
131	Materials
141	Work in Process-Blending
142	Work in Process-Filling
151	Factory Overhead-Blending
152	Factory Overhead-Filling
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
390	Income Summary

	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	Supplies Expense
540	Administrative Expenses
561	Depreciation Expense-Factory
590	Miscellaneous Expense
710	Interest Expense