A manufacturing company applies factory overhead based on direct labor hours. At

Question

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 47,000. The entry to apply the factory overhead costs for the year would include a
a. debit to factory overhead for $377,200.
b. debit to factory overhead for $360,000.
c. credit to factory overhead for $376,000.
d. credit to factory overhead for $360,000.

Explanation / Answer

The actual overhead cost is more that the estimated overhead so the answer the is going to be .credit to factory overhead for $360,000.

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