Exercise 2-14 Factory overhead computed, applied, and adjusted LO P3, P4 The fol
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Exercise 2-14 Factory overhead computed, applied, and adjusted LO P3, P4 The following information applies to the questions displayed belowJ In December 2014, Custom Mfg. established its predetermined overhead rate for jobs produced during year 2015 by using the following cost predictions: overhead costs, $510,000, and direct labor costs, $300,000. At year-end 2015, the company's records show that octual overhead costs for the year are $916,000. Actual direct labor cost had been assigned to jobs as follows. Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory S 400,000 80,000 54,000 Total actual direct labor cost S 534,000 Section Break Exerclse 2-14 Factory overhead computed, appled, and 7. value: 111 points Exercise 2-14 Part 1 1. Determine the predetermined overhead rate for year 2015 Overhead Rate Numerator: Choose Denominator: imated overhead costs imated direct labor costsOverhead rate 510,000S 300,000 | # 170%Explanation / Answer
8 Actual overhead $ 9,16,000 $ 9,07,800 Applied overhead Underapplied overhead $ 8,200 Computation of Applied overhead: Applied overhead = Total actual direct labor cost X predetermined overhead rate = $5,34,000 X 170% = $ 9,07,800 9 Date General Journal Debit Credit Dec-31 Cost of goods sold $ 8,200 Factory overheads $ 8,200 (Being Underapplied overheads allocated to cost of goods sold)
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