Question

Calculator Cavy Company estimates that total factory overhead costs will be $655,576 for the year. Direct labor hours are estimated to be 90,800. a. Determine the: 1. Predetermined factory overhead rate. Round your answer to the nearest cent. per direct labor hour 2. Amount of factory overhead applied to Job 456 if the amount of direct labor hours is 1,100 and Job 888 if the amount of direct labor hours is 2,900. Job 456 Job 888 b. Prepare the journal entry to apply factory overhead for April according to the predetermined overhead rate.

Answer 1

a.

1. Predetermined overhead rate = Estimated overhead cost / Estimated direct labor hours

Predetermined overhead rate = $655,576 / 90,800 = $7.22 per direct labor hour

2. Factory overhead applied:

Job 456 = 1,100*$7.22 = $7,942

Job 888 = 2,900*$7.22 = $20,938

3.

Work in process inventory ($7,942+20,938)	$28,880
Factory overhead		$28,880