Question
In: Accounting
A manufacturing company applies factory overhead based on direct labor hours.
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 47,000. The entry to apply the factory overhead costs for the year would include a
a. debit to factory overhead for $377,200.
b. debit to factory overhead for $360,000.
c. credit to factory overhead for $376,000.
d. credit to factory overhead for $360,000.
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Expert Solution
c. credit to factory overhead for $376,000
Predetermined Overhead Rate
= $360,000 / 45,000 hrs
= $8 per labor hr
Applied Overhead = 47,000 hrs * $8 per hour
= $376,000
Actual Overhead = $377,200
Underapplied Overhead = $377,200 - $376,000
= $1,200
ekkarill92 answered 2 years agoRelated Solutions
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