The predetermined overhead rate for Foster,Inc.,is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000.Actual costs incurred were:
(a)Calculate the predetermined overhead rate and calculate the overhead applied during the year.
(b)Prepare the journal entry to eliminate the over- or underapplied overhead,assuming that it is not material in amount.

Question

The predetermined overhead rate for Foster,Inc.,is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000.Actual costs incurred were:
 (a)Calculate the predetermined overhead rate and calculate the overhead applied during the year.
(b)Prepare the journal entry to eliminate the over- or underapplied overhead,assuming that it is not material in amount.

Quizplus · Accepted Answer

The Answer of The predetermined overhead rate for Foster,Inc.,is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000.Actual costs incurred were:
 (a)Calculate the predetermined overhead rate and calculate the overhead applied during the year.
(b)Prepare the journal entry to eliminate the over- or underapplied overhead,assuming that it is not material in amount.

The Predetermined Overhead Rate for Foster,Inc