Question

Exercise 15-16 Factory overhead computed, applied, and adjusted LO P3, P4 At the beginning of the year, Infodeo established its predetermined overhead rate for movies produced during the year by using the following cost predictions: overhead costs, $1,540,000,and direct labor costs, $440,000. At year-end, the company's records show that actual overhead costs for the year are $2,225,200. Actual direct labor cost had been assigned to jobs as follows. Movies completed and released Movies still in production Total actual direct labor cost $600,000 39,000 $639,000 1. Determine the predetermined overhead rate for the year. 2&3. Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate and 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. Req 1 Req 2 and Reg 4 Enter the overhead costs incurred and the amounts applied during the year using the predetermined over determine whether overhead is overapplied or underapplied. Actual overhead 0 Overapplied overhead < Reg 1 Reg 4 > < Prey 3 of 3 Next

Answer 1

1) Predetermine overhead rate = 1540000/440000 = 350% of labor cost

2&3) T account

Actual overhead	2225200	2236500	Applied overhead (639000*3.5)
		11300	Over applied overhead

Over applied overhead = 11300

4) Journal entry

No	General Journal	Debit	Credit
	Manufacturing overhead	11300
	Cost of goods sold		11300