Question
In: Accounting
The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The...
The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. Prepare the journal entry to apply factory overhead.
Solutions
Expert Solution
The predetermined overhead rate is (
1,250,000 / 40,000) =
31.25 per machine hour.
In April, the recorded overhead would have been (4,780 x
31.25) =
149,375
This amount is larger than the actual overhead, so overhead was
over-applied by
(
149,375 -
141,800) =
7,575
ekkarill92 answered 2 years agoRelated Solutions
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