A Manufacturing Company Applies Factory Overhead Based on Direct Labor

question 25

Multiple Choice

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. The journal entry to apply the factory overhead costs for the year would include a

• A)debit to Factory Overhead for $360,000
• B)credit to Factory Overhead for $432,000
• C)debit to Factory Overhead for $377,200
• D)credit to Factory Overhead for $360,000

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Definitions:

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