Calculate and Use Overhead Rate

Selected data for the consulting department of Kingman Consulting Inc., follow:

Estimated consulting overhead cost for the year	$486,000
Estimated direct labor cost for the year (@ $9/hr.)	324,000
Actual consulting overhead cost for May	29,000
Actual direct labor cost for May (2,400 hours)	22,000

Assuming that direct labor hours is the basis for applying consulting overhead,

a. Calculate the predetermined overhead rate. $Answer

per direct labor hour

b. Prepare a journal entry that applies consulting overhead for May.

General Journal
Description	Debit	Credit
AnswerConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory	Answer	Answer
AnswerConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory	Answer	Answer Incorrect Mark 0.00 out of 1.00

c. By what amount is consulting overhead over-or under-applied in May?

$Answer

Answerunder-appliedover-applied