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Darling company estimates that total factory overhead costs will be $130,000 for the year, direct labor hours are estimated to be 26,000 a. For darling company, determine the predetermined factory overhead rate using direct labor hours as the activity base. Per direct labor hour b. During may, darling company accumulated 890 hours of direct labor costs on job 200 and 530 hours on job 305. Determine the amount of factory overhead applied to jobs 200 and 305 in may. Prepare the journal entry to apply factory overhead to both jobs in may according to the predetermined overheed rate.

Respuesta :

In order to calculate the Total factory overhead costs: -

We Know,

  • Predetermined Factory Overhead Rate =  Total Factory Overhead Costs / Direct Labor Hours
  • Factory overheads applied to Job 305 =  Predetermined overhead rate × Direct labor hours

Statement showing Computations

  • Particulars                                                           Amount

    a)

  • Estimated total factory overhead costs         620,000.00
  • Direct labor hours                                              80,000.00  
  • Predetermined factory overhead rate
  • = 620,000 / 80,000                                             7.75

    b)

  • Factory overhead applied to Job 200          
  • = 2500 × 7.75                                                      19,375.00
  • Factory overhead applied to Job 305
  • = 3000 × 7.75                                                      23,250.00  

JOURNAL ENTRY                             Dr.                      Cr.

Work in Process Dr.                                42,625.00  

To Factory Overhead                                                             42,625.00

Therefore, Total factory overhead cost is 42,625.00.

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