Question

# Cavy Company estimates that total factory overhead costs will be \$733,460 for the year. Direct labor...

Cavy Company estimates that total factory overhead costs will be \$733,460 for the year. Direct labor hours are estimated to be 91,000.

Required: (a) Determine the: (1) Predetermined factory overhead rate

(2) Amount of factory overhead applied to Job 567 if the amount of direct labor hours is 1,400 and Job 999 if the amount of direct labor hours is 2,900

(b) Prepare the journal entry to apply factory overhead for April according to the predetermined overhead rate. Refer to the Chart of Accounts for exact wording of account titles.

 Predetermined factory overhead rate per direct labor hour

(a)(2) Determine the amount of factory overhead applied to Job 567 if the amount of direct labor hours is 1,400 and Job 999 if the amount of direct labor hours is 2,900.

 Job 567: Job 999:

= 733460/91000

= \$ 8.06 per DLH

2)

 Job Actual direct labor hours Overhead applied 567 1400 1400*8.06= 11284 999 2900 2900*8.06= 23374 Total overhead applied 34658

b)

 Date Account title Debit credit Work in process inventory 34658 Factory overhead 34658