6. At the beginning of the year, Gaudi Company estimated the following: Overhead $432,000 Direct labor hours 90,000

Gaudi uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 7,650. By the end of the year, Gaudi showed the following actual amounts:

Overhead $436,000 Direct labor hours 89,600

Assume that unadjusted Cost of Goods Sold for Gaudi was $707,000.

Required:

a. Calculate the predetermined overhead rate for Gaudi.

b. Calculate the total applied overhead for the year. Was overhead over- or underapplied? By how much?

c. Calculate adjusted Cost of Goods Sold after adjusting for the overhead variance.