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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Definitions:

Material Alteration

A significant change that modifies the nature or terms of a document or agreement, potentially affecting its legal obligations or rights.

Figures

Numerical data or statistics, often used for analysis or to illustrate a point.

Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or a specified person.

FTC Rule 433

Also known as the "Holder in Due Course" rule, which protects consumers entering into credit contracts by preserving their claims and defenses against the seller.