Cavy Company Estimates That the Factory Overhead for the Following

question 188

Essay

Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. Prepare the journal entry to apply factory overhead.

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Definitions:

Capital Market Line

A line used in the Capital Asset Pricing Model to illustrate the rates of return for efficient portfolios subject to the risk (measured by standard deviation) compared to the risk-free rate of return.

Efficient Frontier

Efficient Frontier is a concept in modern portfolio theory that refers to a set of investment portfolios that offer the highest expected return for a given level of risk.

Standard Deviation

A measure of the dispersion or variability of a set of data points or investment returns around the mean.

Covariance

A measure indicating the degree to which two variables move in relation to each other.