Answer:
1a. Predetermined Overhead Rate= 60%
Explanation:
Predetermined Overhead Rate=
Estinated overhead cost/Direct labor cost= $1,440,000/(40*$20*3000)
=60%
1b. Total Overhead Cost applied to each job
Job No Direct Labor Applied FOH60%
201 606,000 363,600
202 565,000 339,000
203 300,000 180,000
204 718,000 430,800
205 316,000 189,600
206 19,000 11,400
Total $2,524,000 $1,513,600
Overhead cost applied=
Direct Labor (1.b) * Predetermine overhead rate (1.a)
example:
(Job No. 201) 606,000 * 0.6 = 363,600
1c. Over applied or under applied at year end 2017
Actual Over head cost $1,542,000
Less:Overhead Appied - $1,513,600
Under applied over head $28,400
2. Adjusting Entry
Date Account Title Debit Credit
Dec Cost of goods $28,400 -
-31 sold
Factory - $28,400
Overhead
