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The Cavy Company Estimates That the Factory Overhead for the Following

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Essay

The 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 was 4,780. Prepare the journal entry to apply factory overhead.


Definitions:

Salvage Value

The predicted disposal value of an asset at the conclusion of its usable life.

Net Cash Flows

The amount of cash that is generated or lost over a specific period, considering all cash inflows and outflows from operations, financing, and investing activities.

Year-End

The conclusion of a fiscal year when a company completes its accounting period, often used to finalize financial reports and assess annual performance.

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