Question

Baltimore Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $280,000 and direct labor hours of 25,000. During the month of February 2019, Job 2-1 incurred direct labor of 450 hours. Use this information to prepare the end of the month application General Journal entry (without explanation) of factory overhead for Job 2-1 for the month. If no entry is required then write "No Entry Required."

Answer 1

Answer:

WIP 5,040

Factory Overhead 5,040

Explanation:

$\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate$

280,000/25,000 = 11.2 per labour hor

Job labour hors x rate = overhead applied

450 x 11.2 = 5,040

We will increase the work in process, because there is no information about the job being complete.

And we will use the factory overhead account to post the applied overhead