NEED-TO-KNOW 19-4 A manufacturing company estimates it will incur $240,000 of overhead costs in the next year. The company allocates overhead using machine hours, and estimates it will use 1,600 machine hours in the next year. During the month of June, the company used 80 machine hours on Job 1 and 70 machine hours on Job 2. 1. Compute the predetermined overhead rate to be used to apply overhead during the year. Predetermined Overhead Rate Estimated Overhead Costs Estimated Activity Base 2. Determine how much overhead should be applied to Job 1 and to Job 2 for June. OH Applied x Predetermined OH rate Machine Hours Used 80 hours 70 hours 150 hours Job 1 Job 2 Total 3. Prepare the journal entry to record overhead applied for June. General Journal Work in Process Inventory Factory Overhead Debit Credit Learning Objective P3: Describe and record the flow of overhead costs in job order costing