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Exercise 15-14 Factory overhead computed, applied, and adjusted LO P3, P4 [The following information applies to the questionsExercise 15-14 Part 1 1. Determine the predetermined overhead rate for year 2015. Overhead Rate Choose Denominator: Choose NuExercise 15-14 Part 2&3 2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermineExercise 15-14 Part 4 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold. Vi

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Answer #1
1) Predetermined OH rate = Total Estimated OH cost / Total Estimated Direct Labor Cost
= $ 900000 / $ 500000
= 1.8 times
2 & 3) Factory OH
Actual OH costs $ 894,500.00 $ 885,600.00 Applied OH cost
$     8,900.00 Underapplied OH cost
$ 894,500.00 $ 894,500.00
4) Journal Entry
Entry to close Underapplied OH cost
Particulars Debit Credit
Cost of Goods sold $ 8,900.00
To Factory OH $ 8,900.00
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