Calculating the Predetermined Overhead Rate, Applying Overhead to Production, Reconciling Overhead at the End of the Year, Adjusting Cost of Goods Sold for Under- and Overapplied Overhead

At the beginning of the year, Han Company estimated the following:

Overhead	$448,400
Direct labor hours	76,000

Han uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 6,100. By the end of the year, Han showed the following actual amounts:

Overhead	$409,170
Direct labor hours	78,100

Assume that unadjusted Cost of Goods Sold for Han was $985,000. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Required:

1. Calculate the predetermined overhead rate for Han. Round your answer to the nearest cent.

   $fill in the blank 2 per direct labor hour

2. Calculate the overhead applied to production in January. Do not round intermediate calculations. Round your answer to the nearest dollar.

   $fill in the blank 3

3. Calculate the total applied overhead for the year. Do not round intermediate calculations. Round your answer to the nearest dollar.

   $fill in the blank 4

   Was overhead over- or underapplied? By how much? Enter your answer for the overhead variance as a positive value. Enter zero if the overhead was applied correctly. Round your answer to the nearest dollar.

   Overhead was by $fill in the blank 6.

4. Calculate adjusted Cost of Goods Sold after adjusting for the overhead variance. Round your answer to the nearest dollar.