5. Journalize the Application of Manufacturing Overhead The company allocates factory overhead based upon machine hours used. At the beginning of the period, the company estimates factory overhead to be $10,000 and expects the equipment to be used for 5,000 machine hours. Therefore, the predetermined overhead rate for Smith corporation is $2 per machine hour ($10,000/5,000). In October, 3,000 actual machme-hours were worked. The total FOH Applied would be (S2 X 3,000 = $6,000) Credit Debit 60,000 WIP FOH 6. Journalize the Transfer of Completed Units During the period, the corporation completed jobs with a total cost of $4,000. Debit Credit 7. Journalize the Transfer of Units Sold Smith sold the $2,000 in Finished Goods Inventory to customers for $3,500 on account. Two journal entries are required here. (a) for the sales revenue eamed, and (b) for the transfer of finished goods to the Cost of Goods sold. a) Debit Credit Debit Credit