The predetermined overhead allocation rate for Forsythe, 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.Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.

Question

The predetermined overhead allocation rate for Forsythe, 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.Determine the amount of over- or underapplied overhead and 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 allocation rate for Forsythe, 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.Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.

The Predetermined Overhead Allocation Rate for Forsythe, Inc