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Question
The Brass Works is in the process of determining manufacturing overhead. Journalize events (a) through (d) to Factory Overhead, Administrative Expenses, or Selling Expenses, or allocate between the three as appropriate. Next, compute the predetermined factory overhead rate and apply overhead to Work in Process.
a. Brass Works purchases an insurance policy for $4,000. It has been determined that 80% of the value of the policy protects production, and the balance protects the administrative offices. Brass Works charges insurance initially to expense.
b. The electric bill shows an amount due of $1,200. This meter is utilized only by production, as the office spaces have their own meter.
c. Payroll reports that the sales manager’s salary for the period is $3,500 and that production supervisors' wages for the period are $5,500.
d. The stockroom reports that $2,575 in materials were purchased for the Maintenance Department.
e. If the driver for the application of overhead is drop-forge strokes and there are expected to be 1,000 strokes in this period, what is the rate per stroke? Round to three decimal places.
f. Assuming that there are 1,150 drop-forge strokes in this period, apply factory overhead to Work in Process. Round to the nearest dollar.
Answer
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