Recording Actual Manufacturing Overhead
Response to the following problem:
The cost of certain overhead items for the month was as follows:
Rent for production facility $3,900
Insurance premium for the month 2,250
Monthly depreciation on equipment 4,750
Repairs on equipment 5,200
Payment for these items was as follows:
a. The company is required to pay for one year's rent in advance. The total for one year is $46,800; this amount was paid three months ago. The $3,900 amount represents the rent applicable for this month.
b. The company is required to pay for six months' insurance in advance. The total for six months is $13,500; this amount was paid two months ago. The $2,250 amount represents the insurance applicable for this month.
c. Depreciation is recognized on a straight-line basis.
d. The repairs were performed in the current month. The company will pay for the repairs next month.
Make the necessary journal entries to record these items.