Question

Applying Factory Overhead Jernigan Company estimates that total factory overhead costs will be $68,000 for the year. Direct labor hours are estimated to be 17,000. a. For Jernigan Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. If required, round your answer to two decimal places. per direct labor hour $ b. During May, Jernigan Company accumulated 720 hours of direct labor costs on Job 200 and 620 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. $ Feedback c. Prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate. If an amount box does not require an entry, leave it blank. Work in Process Factory Overhead

Answer 1

Correct Answer:

a

predetermined Overhead rate per Direct labor hour

$             4

Working:

A	Estimated total factory overhead cost	$     68,000
B	estimated labor hours	17000
A/B	predetermined Overhead rate per Direct labor hour	$                4

b

Factory OH applied to Job 200 and Job 302

$    5,360

Working:

		Job 200	Job 305	Total
X	direct labor hours allocated	720	620	1340
Y	predetermined Overhead rate per Direct labor hour	$ 4	$ 4
Z=X*Y	factory overhead applied	$        2,880	$        2,480	$          5,360

C:

General Journal	Debit	Credit
Work in process	$        5,360
Factory Overhead		$        5,360

End of Answer.

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