The Cavy Company Estimates That the Factory Overhead for the Following

question 116

Essay

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. 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 was 4,780. What is the amount that will be applied to all of the jobs for the month of April?

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Definitions:

LIFO Inventory

An inventory valuation method where the last items added to inventory are the first ones to be used or sold.

Merchandise Inventory

Goods that a company holds for the purpose of selling them to customers, often a significant asset on the balance sheet for retailers.

Lower Of Cost

A principle in accounting that dictates inventory or other assets should be reported at the lower amount between its historical cost and its market value.