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Cavy Company estimates that total factory overhead costs will be $795,874 for the year
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Cavy Company estimates that total factory overhead costs will be $795,874 for the year. Direct labor hours are estimated to be 103,900. a. Compute the predetermined factory overhead rate. Round your answer to the nearest cent. per direct labor hour b. Determine the amount of factory overhead applied to Job 456 if the amount of direct labor hours is 1,300 and to Job 888 if the amount of direct labor hours is 2,700. Job 456 Job 888 C. Journalize the entry to record the factory overhead applied if Jobs 456 and 888 are the only jobs for the period. If an amount box does not require an entry, leave it blank
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Expert Solution
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Answer-
(a) The predetermined factory overhead rate
Solution-
Predetermined factory overhead rate = $795,874 / 103,900
Predetermined factory overhead rate = $7.66
(b) the amount of factory overhead applied to Job 456 if the amount of direct labor hours is 1,300 and Job 888 if the amount of direct labor hours is 2,700Solution-
For Job 456: 1300 hours*$7.66= $9,958
For Job 888: 2700 hours*$7.66= $20,682
(c) prepare the journal entry to apply factory overhead in April according to the predetermined overhead rate.
Solution-
S.No Account title and Explanation
Amount (Debit) Amount (Credit) 1. Work in Process $30,640 Factory Overhead $30,640 $9,958+ $20,682 = $30,640
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