Question

Applying Factory Overhead Darling Company estimates that total factory overhead costs will be $288,000 for the year. Direct labor hours are estimated to be 18,000. a. For Darling 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, Darling Company accumulated 790 hours of direct labor costs on Job 200 and 760 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. 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 incess Factory Odropdown

Answer 1

Solution a)	Computation of Predetermined O/H Rate
	Predetermined O/H Rate =	Estimated Factory O/H Costs
		Estimated Direct Labor Hours
	Predetermined O/H Rate =	16
		(288000/18000)
Solution b)	Computation of factory overhead applied to job 345 and job 777
	Direct Labor Hours * Predetermined O/H Rate
	Labour Hours	Predetermined O/H Rate	Applied O/H
Job 200	790	16	12640
Job 305	760	16	12160
Solution c)	Journal entry to record to apply factory overhead:
Date	Accounts and Explanation	Debit	Credit
	Work in Progress	24800
	Factory O/H (12640+12160)		24800
	(To record the material cost)