Question

Exercise 15-16 Factory overhead computed, applied, and adjusted LO P3, P4 At the beginning of the year, Infodeo established its predetermined overhead rate for movies produced during the year by using the following cost predictions: overhead costs, $1,935,000, and direct labor costs, $430,000. At year-end, the company's records show that actual overhead costs for the year are $1,074,500. Actual direct labor cost had been assigned to jobs as follows. Movies completed and released Movies still in production Total actual direct labor cost $200,000 41,000 $241,000 1. Determine the predetermined overhead rate for the year. 2&3. Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 and 3 Reg 4 Determine the predetermined overhead rate for the year. Overhead Rate 1 Choose Denominator: Choose Numerator: Overhead Rate Overhead rate Reg 1 Req 2 and 3 >

Answer 1

1) Overhead rate

Choose numerator	/	Choose denominator	=	Overhead rate
Estimated overhead	/	Estimated Direct labor cost	=	Overhead rate
1935000	/	430000	=	450% of direct labor cost

2&3) Factory overhead - T account

Actual overhead	1074500	1084500	Applied overhead (241000*4.5)
		10000	Balance

Over applied overhead = $10000

4) Adjusting entry

Date	account and explanation	Debit	Credit
	Factory overhead	10000
	Cost of goods sold		10000