#7

At the beginning of the year, Custom Manufacturing set its predetermined overhead rate using the following estimates: overhead costs, $840,000, and direct materials costs, $400,000.At year-end, the company reports that actual overhead costs for the year are $848,400. 1. Determine the predetermined overhead rate using estimated direct materials costs 2. Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the predetermined overhead rate using estimated direct materials costs. Overhead Rate Numerator: Denominator: Overhead Rate = Overhead rate / mead Rate Numerator: Denominator: +. Accounts receivable Average raw materials inventory Cost of goods sold Estimated direct material costs Required 1 Required 2 Required 3 Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. Factory Overhead Factory Overhead Actual overhead Direct labor cost Estimated overhead Applied overhead Direct labor cost Estimated overhead Applied overhead Underapplied overhead Overapplied overhead Close underapplied overhead to COGS. Vote: Enter debits before credits. Date General Journal Debit Credit December 31 Accounts payable Accounts receivable Accumulated depreciation-Building Accumulated depreciation-Factory building Accumulated depreciation-Factory building Accumulated depreciation Factory equipment Building Cash Common stock Cost of goods manufactured Cost of goods manufactured Cost of goods sold Depreciation expense-Building Depreciation expense-Factory building Depreciation expense-Factory equipment ei Direct labor used Direct labor used Direct materials used Factory building Factory equipment Factory overhead Factory overhead Factory utilities Factory wages payable Finished goods inventory General and administrative expenses Tann Income summary Indirect labor Insurance expense Interest expense Interest revenue Land Merchandise inventory Notes payable Overapplied overhead Paid-in capital in excess of par value, Common stock Prepaid insurance Prepaid rent Property taxes-Factory Raw materials inventory Raw materials purchased Rent expense Rent payable Rent receivable Repairs-Factory equipment Retained earnings I. Salaries expense Retained earnings Salaries expense Sales Sales discounts Sales returns and allowances Selling evnences Supplies Supplies expense Underapplied overhead Utilities expense Utilities payable Work in process inventory