Overhead Rate Calculation and Journal Entry. In 20x4, the Wilshire Woolen Company used 200,000 direct labor hours and incurred variable factory overbead of $120,000. The company used this information as a basis for determining the variable factory overhead rate of 20x5.

a. What is the rate for 20x5?

b. Assume that 15,000 direct labor hours werp worked during January, 20x5, Prepare the journal entry to record the application of variable factory overhead for January.