Question

At the beginning of the year, Custom Mfg established its predetermined overhead rate by using the following cost predictions: overhead costs $510,000, and direct materials costs, $300,000. At year-end, the company's records show that actual overhead costs for the year are $948.200. Actual direct materials cost had been assigned to jobs as follows. $410,000 Jobs completed and sold Jobs in Finished goods Inventory Jobs in work in process inventory Total actual direct materials cost 59.000 $552.000 1. Determine the predetermined overhead rate. 283. Enter the overhead costs incurred and the amounts applied to jobs 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. Reg1 Req 2 and 3 Reg 4 Determine the predetermined overhead rate. Overhead Rate Choose Denominator Choose Numerator - Overhead Rate RSS Req 2 and 3 >

Answer 1

1
Overhead rate	Estimated overhead costs/Estimated direct material costs
Overhead rate	510000/300000
Overhead rate	170.00%
2
Factory overhead T-account
Factory overhead
Actual overhead	$948,200
		$938,400	Applied overhead	(552000*170%)
Underapplied overhead	$9,800
Underapplied overhead	$9,800	948200-938400
3
General Journal	Debit	Credit
Cost of goods sold	$9,800
Factory overhead		$9,800