Bell Manufacturers Inc. has estimated total factory overhead costs of $60,000, and 10,000 direct labor hours for the current fiscal year. If job number 117 incurred 2,000 direct labor hours, the work-in-process account will be increased and factory overhead will be decreased by:

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Factory overhead is applied to jobs based on direct labor hours. Job number 117 incurred 2,000 direct labor hours, so it will be assigned $12,000 of factory overhead ($60,000 total factory overhead costs / 10,000 direct labor hours * 2,000 direct labor hours). The work-in-process account will be increased by $12,000 to reflect the cost of the factory overhead applied to the job, and factory overhead will be decreased by $12,000 to reflect the amount of factory overhead that has been applied to jobs.