Answer:
Actual overhead cost for the current period is $950,000,
Actual direct labor cost is $600,000.
Applied overhead cost = 150 % $600,000 = $ 900,000
<h2><u> Overhead </u></h2><h3><u>Dr Cr</u></h3>
Actual Applied
$ 950,000 $ 900,000
<u> Bal 50,000</u>
<u />
Underapplied Overhead $ 50,000
Journal Entry
This method is used mostly as it easy and short
Cost of Good Sold $ 50,000 Dr.
Manufacturing Overhead $ 50,000 Cr.
But actual entry is
Direct LAbor Cost WIP $ 600,000
Actual Overhead $ 900,000
Cost of goods Sold $ 50,000
Manufacturing Overheads 1550,000
