px Exercise 15-15 Factory overhead computed, applied, and adjusted LO P3, P4 The

Question

px Exercise 15-15 Factory overhead computed, applied, and adjusted LO P3, P4 The following information applies to the questions displayed below In December 2014, Infodeo established its predetermined overhead rate for movies produced during year 2015 by using the following cost predictions: overhead costs, S1.680,000, and direct labor costs, $480,000 At year-end 2015, the company's records show that actual overhead costs for the year are $1,652,000 Actual direct labor cost had been assigned to jobs as follows. Movies completed and released Movies still in production Total actual direct labor cost s 425,000 50,000 $475,000 $ References

Explanation / Answer

1. Predetermined overhead = estimated ovheard cost / estimated direct labor cost

= $1680000 / $480000

= 350%

2. Actual overhead = $1652000

less: overhead applied {$475000 * 350%} = $1662500

Over applied overhead = $10500

3.

  

Dec 31 Facotry overhead $10500 To Cost of goods sold $10500

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