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orior to recognizing the jobs 1) ABC Company estimates that total factory overhead costs will be $2,000,000 for the year. Direct labor hours are estimated
orior to recognizing the jobs 1) ABC Company estimates that total factory overhead costs will be $2,000,000 for the year. Direct labor hours are estimated to be 400,000 hours. During the ABC Company accumulated 15,000 hours of direct labor costs on Job 10 and 18,000 hours on Job 11. (5 points) Instructions: a) Calculate the predetermined factory overhead rate using direct labor hours as the activity base. b) Calculate the amount of factory overhead applied to Jobs 10 and 11 in May. c) Prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate. 2) XYZ Company uses a job order cost system to determine the cost of doing repair work. The average shop direct labor rate is $25 per hour. Estimated costs and expenses for the coming year are as follows: Engine Parts Shop direct labor Depreciation on shop equipment Shop supervisor salaries Shop property taxes Shop supplies $675,000 400,000 60,000 110,000 30,000 12,000 40,000 87,000 10,000 Advertising expense Administrative office salaries Administrative office depreciation expense Instructions; Calculate the predetermined overhead rate using direct labor hours as the activity base. (10 points)
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