At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $810,000, and direct materials costs, $300,000. At year-end, the companys records show that actual overhead costs for the year are $1,514,700. Actual direct materials cost had been assigned to jobs as follows.

Jobs completed and sold	$	420,000
Jobs in finished goods inventory		79,000
Jobs in work in process inventory		59,000
Total actual direct materials cost	$	558,000

1. Determine the predetermined overhead rate. 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.

Determine the predetermined overhead rate.

Overhead Rate
Choose Numerator:	/	Choose Denominator:	=	Overhead Rate
	/		=	Overhead rate
	/		=	0

Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.

Factory Overhead
Actual overhead			Applied overhead
Underapplied overhead
	0

Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.

No	Date	General Journal	Debit	Credit
1	Dec 31	Cost of goods sold
		Factory overhead