At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $780,000, and direct materials costs, $600,000. At year-end, the companys records show that actual overhead costs for the year are $644,200. Actual direct materials cost had been assigned to jobs as follows.

2&3. Enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied. 4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.

Jobs completed and sold Jobs in finished goods inventory Jobs in work in process inventory Total actual direct materials cost $370,000 72,000 46,000 $488,000 Journal entry worksheet Record entry to allocate underapplied /overapplied overhead. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal