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Quiz Saved In December 2016. Learer Companys manager estimated next years total direct labor cost assuming 40 persons worki


Qutz In December 2016. Learer Companys manager estimated next years total direct labor cost assuring 40 persons working an


15 Quiz Saved In December 2016. Learer Companys manager estimated next years total direct labor cost assuming 40 persons wo
In December 2016, Learer Companys manager estimated next years total direct labor cost assuming 40 persons working an avera
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Answer #1
1(a). Predetermined overhead rate= Estimated overhead/Estimated direct labour cost
1500000/2000000= 75%
Direct labour cost= 40 persons*2000 hours*$25= $2000000
1(b) Total overhead applied to each of 6 jobs
Job No Direct labour Applied overhead (75%)
201 612000 459000
202 571000 428250
203 306000 229500
204 724000 543000
205 322000 241500
206 25000 18750
Total 1920000
1© Actual overhead cost= $1941000
Applied overhead= $1920000
Underapplied overhea= 1941000-1920000= $21000
2. Journal entry
31-Dec Cost of goods sold 21000
   Factory overhead 21000
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