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 ACCOUNTSLockmiller CompanyGeneral Ledger ASSETS110Cash121Accounts Receivable125Notes Receivable126Interest Receivable131Materials132Work in Process133Factory Overhead134Finished Goods141Supplies142Prepaid Insurance143Prepaid Expenses181Land191Factory192Accumulated Depreciation-Factory LIABILITIES210Accounts Payable221Utilities Payable231Notes Payable236Interest Payable241Lease Payable251Wages Payable252Consultant Fees Payable EQUITY311Common Stock340Retained Earnings351Dividends REVENUE410Sales610Interest Revenue EXPENSES510Cost of Goods Sold520Wages Expense531Selling Expenses532Insurance Expense533Utilities Expense534Office Supplies Expense540Administrative Expenses560Depreciation Expense-Factory590Miscellaneous Expense710Interest 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.

Name: Lockmiller Company estimates that total factory overhead costs will be
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Description: 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

Predetermined overhead rate = Total estimated factory overhead costs / total estimated Direct labor hoursa. Predetermined factory overhead rate = $867,000 / 102,000 = $8.50 per hour b. Amount of factory overhead applied to: Jobs 275 = 1,900 hours x $8.50 per hour = $16,150 Job 310 = 2,600 hours x $8.50 per hour = $22,100 c. No, Account Titles and Explanation Debit Credit 1. Work in Process ($16,150 + $22,100) $38,250 Factory Overhead $38,250

Answered: Lockmiller Company estimates that total…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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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