Answer:
1. Predetermined Overhead Rate 2.3
2. Under applied Overhead $ 8300
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3.Cost of goods sold $ 8,300 Dr
Factory overhead $ 8300 Cr
Explanation:
As direct labor is not given overhead rate is calculated on the basis of direct material costs
Predetermined Overhead Rate= Estimated Overheads/ Estimated Direct Materials Cost
1. Predetermined Overhead Rate= $460,000/ $200,000= 2.3
<u><em>Now we multiply the predetermined overhead rate with the actual material costs to get the aplpied overhead. And the difference is found.</em></u>
Actual Overheads $1,271,100
Applied Overheads = 2.3 * $ 549,000 = $ 1262700
2. Under applied Overhead = Actual Overhead- Applied Overhead
= $1,271,100-$ 1262700= $ 8300
<u><em>The under applied overhead is debited to Cost Of Goods Sold.</em></u>
<u>No Date General Journal Debit Credit</u>
1 Dec 31 Cost of goods sold $ 8,300 Dr
1 Factory overhead $ 8300 Cr
