Calculate and Use Overhead Rate Selected data for the consulting department of Austin Consulting, Inc., follow:...

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Calculate and Use Overhead Rate Selected data for the consulting department of Austin Consulting, Inc., follow: Estimated con

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Answer 1

Answer #1

1. Pre-determined Overhead rate: 360000/180000*100 = 200% of Direct Labor Cost.

2.

Work In process - Inventory Dr	22000
To Consulting Overhead		22000
(Being Overhead applied based on Pre-determined rate)

Since Actual DL = 11000 $, Overhead => 11000*200% = 22000.

3.

Thus consulting overhead was Over-applied by 2500 $ (ie 22000-19500).

(please comment in case of any query regarding the solution)

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Answer 2

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