At the beginning of the year, Learer Companys manager estimated total direct labor cost to be $2,520,000. The manager also estimated the following overhead costs for the year.

Indirect labor	$ 561,200
Rent on factory building	142,000
Factory utilities	158,000
DepreciationFactory equipment	482,000
Repairs expenseFactory equipment	62,000
Indirect materials	106,800
Total estimated overhead costs	$ 1,512,000

For the year, the company incurred $1,526,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $606,000; Job 202, $565,000; Job 203, $300,000; Job 204, $718,000; and Job 205, $316,000. In addition, Job 206 is in process at the end of the year and had been charged $19,000 for direct labor. No jobs were in process at the beginning of the year. The companys predetermined overhead rate is based on a percent of direct labor cost. Required 1-a. Determine the predetermined overhead rate for the year. 1-b. Determine the overhead applied to each of the six jobs during the year. 1-c. Determine the over- or underapplied overhead at the year-end. 2. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold at year-end.

Predetermined overhead rate
Numerator:	/	Denominator:	=	Predetermined overhead rate
	/		=	Predetermined overhead rate
	/		=

201	$606,000
202	565,000
203	300,000
204	718,000
205	316,000
206	19,000
Total	$2,524,000

Factory Overhead

Journal entry worksheet

Record the entry to allocate any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
December 31