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    Johnson Company

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    Johnson Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Johnson make to assign the Factory Payroll?

    A) Payroll Expense 28,900
    Cash 28,900
    B) Payroll Expense 24,600
    Factory Overhead 4,300
    Factory Payroll 28,900
    C) Goods in Process Inventory 24,600
    Factory Overhead 4,300
    Factory Payroll 28,900
    D) Goods in Process Inventory 24,600
    Factory Overhead 4,300
    Accrued Wages Payable 28,900
    E) Goods in Process Inventory 28,900
    Factory Payroll 28,900

    TVD Company uses a job order cost accounting system and last period incurred $80,000 of overhead and $100,000 of direct labor. TVD estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If BVD bases applied overhead on direct labor cost, their overhead application rate for the next period should be

    A. 75%
    B. 80%
    C. 107%
    D. 125%
    E. 133%

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    https://brainmass.com/business/accounting/johnson-company-232927

    Solution Preview

    Johnson Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Johnson make to assign the Factory Payroll?

    A) Payroll Expense 28,900
    Cash ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what their overhead application rate for the next period should be.

    $2.19

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