Question

Help Save Exercise 15-15 Factory overhead computed, applied, and adjusted LO P3, P4 At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions overhead costs, $180,000, and direct materials costs, $100,000. At year-end, the company's records show that actual overhead costs for the year are $920,400. Actual direct materials cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory Total actual direct materials cost $380,000 71,000 55.000 $506,000 terials cost $506,000 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. Reg 1 Reg 2 and 3 Reg 4 Determine the predetermined overhead rate. Overhead Rate Choose Denominator Choose Numerator: Overhead Rate Overhead rate Reg 2 and 3 > Prev 1 of 1 Next

Answer 1

1
Overhead rate
Choose Numerator:	/	Choose Denominator:	=	Overhead rate
Estimated Overhead costs	/	Estimated direct material costs	=	Overhead rate
180000	/	100000	=	180%
2
Factory Overhead
Actual overhead	920400	910800	Applied overhead
Underapplied overhead	9600
4
	Debit	Credit
Cost of goods sold	9600
Factory overhead		9600
Workings:
Applied overhead	910800	=506000*180%