Question 8 (8 points)
Baltimore Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $280,000 and direct labor hours of 25,000. During the month of February 2019, Job 2-1 incurred direct labor of 450 hours. Use this information to prepare the end of the month application General Journal entry (without explanation) of factory overhead for Job 2-1 for the month. If no entry is required then write "No Entry Required."
General Journal:
Date |
Accounts |
Debit |
Credit |
2/28/19 |
|||
JOURNAL ENTRY
Date | Accounts | Debit | Credit |
2/28/19 | Work in progress job 2-1 | $5040 | |
Factory overhead cost | $5040 |
As provided in the question, overhead application rate is based on total estimated overhead cost and direct labour hours.
Estimated overhead cost = $280000
Estimated direct labor hour = 25000
Estimated overhead per hour = 280000 ÷ 25000
=$ 11.20 per hour
Cost allocated to job = Estimated Overhead per hour × Actual Direct labor hours
= 11.20 × 450
= $ 5040
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Question 8 (8 points) Baltimore Company uses a job order cost system and applies overhead based...
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