Question

EB13.

LO 4.7During the month, Job Arch2 used specialized machinery for 350 hours and incurred $700 in utilities on account, $400 in factory depreciation expense, and $200 in property tax on the factory. Prepare journal entries for the following:

Record the expenses incurred.
Record the allocation of overhead at the predetermined rate of $1.50 per machine hour.

Answer 1

Journal entries to record the expenses incurred are given below.

Debit Factory Overhead Control Account $ 1300

Credit Utilities bills account $ 700

Credit Accumlated factory depreciation $ 400

Credit property tax payable $ 200

Journal entries to record the allocation of overhead at the predetermined rate of $1.50 per machine hour are given below.

Debit WiP process account $ 525

Credit Factory overhead applied account $ 525

(1.5 * 350 (machine hours))