Question

Applying Factory Overhead Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,000.
a. For Bergan Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. If required, round your answer to two decimal places. $ per direct labor hour

b. During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. $

c. Prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Applying Factory Overhead Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,000.

A) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 620,000/80,000= $7.75 per direct labor hour

B) Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305.

Job 200:

Allocated overhead= 2,500*7.75= $19,375

Job 305:

Allocated overhead= 3,000*7.75= $23,250

C) Job 200                     19,375

   Job 305                      23,250

                         Allocated Overhead          42,625