Question

12 Exercise 15-15 Factory overhead computed, applied, and adjusted LO P3, P4 At the beginning of the year Custom Maig established its predetermined overhead rate by using the following cost predictions overhead costs $900.000, and direct materials costs, $400,000. At year-end, the company's records show that actual overhead cost for the year are $124800. Actual direct materials cost had been assigned to jobs as follows. - ર completed and sold in work in process inventory Total sal dit materials coat 3390,000 14.000 50.000 3514,600 t. 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 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. Reg1 Reg 2 and 3 Reg 4 Determine the predetermined overhead rate. Co Numero Choose Denominator Overhead Rate Overhead rate Reg Reg 2 and 3 > Accounts receivable Average raw materials Inventory Cette < Prev 12 of 14 Next > 20 A

Answer 1

Req 1.
Pre-determined OH rate
Budgeted Overheads cost /	Budgeted Direct Material cost =	Overheads rate
960,000                                 /	400,000   =		240%	of direct material cost
Req 2.
FACTORY OVERHEADS ACCOUNT
Other accounts		12,41,800	12,33,600	Work in process inventory account
Ending balance		8,200
Thus,
Manufacturing overheads under-applied by $ 8,200
Req 3.
Journal entry
S.no.	Accounts title and explanation		Debit $	Credit $
a.	Cost of goods sold			8,200
	Manufacturing overheads			8,200
	(for under-applied overheads closed in COGS)