Reynolds Manufacturers Inc.has estimated total factory overhead costs of $95,000 and expected direct labor hours of 9,500 for the current fiscal year.If job number 117 incurred 2,300 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for

Question

Quizplus · Accepted Answer

To allocate factory overhead costs to job number 117, we need to use the predetermined overhead rate, which is calculated as follows:

Predetermined overhead rate = Estimated total factory overhead costs / Expected direct labor hours

Predetermined overhead rate = $95,000 / 9,500 = $10 per direct labor hour

To allocate overhead costs for job number 117, we need to multiply the actual direct labor hours (2,300) by the predetermined overhead rate ($10):

Overhead applied to job number 117 = Actual direct labor hours x Predetermined overhead rate

Overhead applied to job number 117 = 2,300 x $10 = $23,000

Therefore, Work in Process will be debited for $23,000 and Factory Overhead will be credited for $23,000. The correct answer is D.