Lockmiller Company estimates that total factory overhead costs will be $867,000 for the year. Direct labor hours are estimated to be 102,000. Required: a. For Lockmiller Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. Round your answer to the nearest cent. b. During May, Lockmiller Company accumulated 1,900 hours of direct labor costs on Job 275 and 2,600 hours on Job 310. Determine the amount of factory overhead applied to Jobs 275 and 310 in May. c. Prepare the journal entry on May 30 to apply factory overhead to both jobs in May according to the predetermined overhead rate. 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lockmiller Company estimates that total factory overhead costs will be $867,000 for the year. Direct labor hours are estimated to be 102,000.
Required:
a. For Lockmiller Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. Round your answer to the nearest cent.
b. During May, Lockmiller Company accumulated 1,900 hours of direct labor costs on Job 275 and 2,600 hours on Job 310. Determine the amount of factory overhead applied to Jobs 275 and 310 in May.
c. Prepare the journal entry on May 30 to apply factory overhead to both jobs in May according to the predetermined overhead rate. 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.
 
 
Chart of Accounts
 
 
CHART OF ACCOUNTS
Lockmiller 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
  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
  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
 
 
Factory Overhead
 
 
a. For Lockmiller Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. Round your answer to the nearest cent.
 
 per direct labor hour
 
b. During May, Lockmiller Company accumulated 1,900 hours of direct labor costs on Job 275 and 2,600 hours on Job 310. Determine the amount of factory overhead applied to Jobs 275 and 310 in May.
 
 
 
Journal
 
 
c. Prepare the journal entry on May 30 to apply factory overhead to both jobs in May according to the predetermined overhead rate. 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.
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