Reconciling Overhead at the End of the Year, Adjusting Cost of Goods Sold for Under- and Overapplied Overhead Refer to Exercise 4-18. By the end of the year, Badiyan showed the following actual amounts: \(\square\)

\[\begin{array}{lr} \text { Overhead } & \$ 308,000 \\ \text { Direct labor hours } & 102,600 \end{array}\]
Assume that unadjusted Cost of Goods Sold for Badiyan was \(\$ 235,670\).
Required:
1. Calculate the total overhead applied for the year. Was overhead over- or underapplied? By how much?
2. Calculated adjusted Cost of Goods Sold after adjusting for the overhead variance.

Exercise 4-18.

Calculating the Predetermined Overhead Rate, Applying Overhead to Production At the beginning of the year, Badiyan Company estimated the following:

\[\begin{array}{lr} \text { Overhead } & \$ 270,000 \\ \text { Direct labor hours } & 90,000 \end{array}\]
Badiyan uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours equaled 8,150 .
Required:
1. Calculate the predetermined overhead rate for Badiyan.
2. Calculate the overhead applied to production in January.

Transcribed Image Text:

Overhead Direct labor hours $308,000 102,600