(APPENDIX 16A) OVERHEAD APPLICATION, JOURNAL ENTRIES, JOB COST At the beginning of the year, Paxton Company budgeted overhead of $180,000 as well as 15,000 direct labor hours. During the year, Job K456 was completed with the following information: direct materials cost, $2,340; direct labor cost, $3,600. The average wage for Paxton Company employees is $10 per hour.

By the end of the year, 15,400 direct labor hours had actually been worked, and Paxton Company incurred the following actual overhead costs for the year:

Equipment lease $ 5,000 Depreciation on building 20,000 Indirect labor 100,000 Utilities 15,000 Other overhead 45,000 Required:
. Calculate the overhead rate for the year.
. Calculate the total cost of Job K456.
. Prepare the journal entries to record actual overhead and to apply overhead to production for the year.
. Is overhead overapplied or underapplied? By how much?
. Assuming that the normal cost of goods sold for the year is $700,000, what is the adjusted cost of goods sold?
Problem