Estimates Made for a Production Department of the Automate Company

question 77

Essay

Estimates made for a production department of the Automate Company for the month of October show: Factory overhead is applied on the basis of direct labor hours.On October 31,the records show these actual figures: Prepare the entry or entries to 1)apply factory overhead to production;2)record actual factory overhead incurred assuming all items were purchased from vendors;3)close out the two factory overhead account balances to set up the overapplied or underapplied factory overhead;and 4)to close the balance in under- or overapplied factory overhead to Cost of Goods Sold.

---

Definitions:

Noncash Investing

Investment activities that do not involve immediate cash transactions, such as acquiring assets through exchange or issuing stock for assets.

Cash Dividend

A cash distribution of earnings by a corporation to its shareholders.

Note Payable

Note payable is a written promise to pay a specified amount of money, often with interest, by a certain date, serving as a formal loan agreement between a borrower and a lender.

Factory Equipment

Durable goods or machinery used in manufacturing processes, typically involving production or maintenance tasks.