Cavy Company estimates that total factory overhead costs will be $660,000 for the year. Direct labor hours are estimated to be 100,000. Determine

(a) the predetermined factory overhead rate,
(b) the amount of factory overhead applied to Job 345 if the amount of direct labor hours is 560 and Job 777 if the amount of direct labor hours is 800, and
(c) prepare the journal entry to apply factory overhead in April according to the predetermined overhead rate.

a) The predetermined factory overhead rate= factory overhead costs/ Direct labor hours = $660,000 / 100,000=  $6.6 per DLH

(b) The amount of factory overhead applied to Job 345 if the amount of direct labor hours is 560= 6.6 *560=  $3696

The amount of factory overhead applied to Job 777 if the amount of direct labor hours is 800 = 6.6 *800= $5280

(c) The journal entry to apply factory overhead in April according to the predetermined overhead rate

The factory Overhead costs for the year are $ 660,000

The predetermined factory overhead rate = $ 6.6

Direct labor hours are estimated to be 100,000 for the year

Direct labor hours are estimated to be  for the month = 100,000/12= 8333.33

The factory Overhead costs for the month are = 8333.33 * 6.6= $ 55,000

Factory Overhead    $ 55000 Dr.

Work In Process     $ 55,000 Cr.

The journal entry to apply factory overhead in April according to the predetermined overhead rate.