Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for...

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Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $11

Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead co

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Answer 1

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Answer #1

Overhead rate = Estimated Overheads/Estimated Labor cost

= 115500/124600

= 92.6966%

i.e. 93%

Overhead applied = Actual direct labor cost*Overhead rate

= 116000*93%

= $107,880

Over applied overhead = $880

The closing entry would be to debit factory overhead and credit cost of goods sold

Hence, the answer is A credit to cost of goods sold for $880

Overhead rate = 456000/2280000

= 20%

Applied overhead = 1940000*20%

= $388000

Underapplied overhead = 422000-388000

= $34,000

Hence, the answer is underapplied by $34000

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Answer 2

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