A Manufacturing Company Applies Factory Overhead Based on Direct Labor

question 9

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 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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