Need assistance with this question, not sure how to complete. In December 2014,

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Need assistance with this question, not sure how to complete.

In December 2014, Learer Company's manager estimated next year's total direct labor cost assuming 40 persons working an average of 2,500 hours each at an average wage rate of $20 per hour. The manager also estimated the following manufacturing overhead costs for year 2015 Indirect labor Factory supervision Rent on factory building Factory utilities Factory insurance expired Depreciation-Factory equipment Repairs expense-Factory equipment Factory supplies used Miscellaneous production costs $ 320,200 111,000 141,000 89,000 69,000 402,000 61,000 69,800 37,000 Total estimated overhead costs $1,300,000 At the end of 2015, records show the company incurred $1,665,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $605,000; Job 202, $564,000; Job 203 $299,000; Job 204, $717,000; and Job 205, $315,000. In addition, Job 206 is in process at the end of 2015 and had been charged $18,000 for direct labor. No jobs were in process at the end of 2014. The company's predetermined overhead rate is based on direct labor cost. Required 1.a Determine the predetermined overhead rate for year 2015 Predetermined overhead rate Choose Numerator: Choose Denominator: Predetermine Overhead Rate Predetermine overhead rate

Explanation / Answer

direct labor cost estimated 2000000 actual 2500000 (605000+564000+299000+717000+315000) 1a PREDETERMINED RATE= (estimated overhead/eestimated labor cost) ie=1300000/2000000 65% b Job direct labor overhead cost applied 201 605000 393250 202 564000 366600 203 299000 194350 204 717000 466050 205 315000 204750 206 18000 11700 1636700 c overhead actual 1665000 applied 1636700 under applied 28300 2 Journal Cost of Goods sold 28300 To Overhead 28300

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