Soved Help Save & Exit Check In December 2016, Custom Mfg. established its prede

Question

Soved Help Save & Exit Check In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the foll cost predictions: overheod costs, $1.440000, and direct materialscosts, $600.000, Al yeak-end 2012, he company s recordis wt actual overhead costs for the year are $1.316,500. Actual direct material cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory Total actual direct materials cost $428,8 76,000 49,808 $545,880 1. Determine the predetermined overhead rate for 2017 2&3. Enter the overhead costs incurred and the amounts applied 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 2 and 3 Req 4 Determine the predetermined overhead rate for 2017 Choose Numerator: Choose Denominator: Overhead Ra Overhead rate Req 2 and 3 >

Explanation / Answer

Answer 1. Predetermined Overhead Rate = $1,440,000 (Budgeted Overhead) / $600,000 (Direct Material Cost - Allocation Base) Predetermined Overhead Rate = 240% of Direct Material Answer 2 & 3. Applied Overhead = $545,000 (Direct Material Cost) X 240% (predetermined overehead rate) Applied Overhead = $1,308,000 Actual Overhead    1,316,500.00 Applied Overhead    1,308,000.00 Underapplied Overhead            8,500.00 Answer 4. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1. Cost of Goods Sold            8,500.00    Manufacturing Overhead            8,500.00 (To record the underapplied overhead)

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