QUESTION 1 Partially correct 13.89 points out of 25.00 P Flag question Calculate

Question

QUESTION 1 Partially correct 13.89 points out of 25.00 P Flag question Calculate and Use Overhead Rate Selected data for the consulting department of Austin Consulting, Inc., follow: Estimated consulting overhead cost for the year $540,000 Estimated direct labor cost for the year(@ $9/hr.) 270,000 Actual manufacturing overhead cost for January 32,000 Actual direct labor cost for January (1,200 hours) 22,000 Assuming that direct labor cost is the basis for applying consulting overhead, a. Calculate the predetermined overhead rate. 1.9 X% b. Prepare a journal entry that applies consulting overhead for January General Journal Description Debit Work in process inventory Consulting overhead 0 X

Explanation / Answer

a Predetermined overhead rate = 540000/270000 = 200% b Work in Process inventory 44000 =22000*200%        Consulting overhead 44000 c Consulting overhead was over-applied by $12000 in January. (44000-32000)

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