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, Potter Company estimated the following:

Overhead $$240,000$

Direct labour hours $80,000$

Potter uses normal costing and applies overhead on the basis of direct labour hours. For the month of January, direct labour hours were $8,350.$ By the end of the year, Potter showed the following actual amounts:

Overhead $$246,000$

Direct labour hours $79,600$

Assume that unadjusted Cost of Goods Sold for Potter was $$336,000.$

Required:

$1.$ Calculate the predetermined overhead rate for Potter. Round your answers to the nearest cent, if rounding is required.

per direct labour hour

$2.$ Calculate the overhead applied to production in January. $($Note: Round to the nearest dollar, if rounding is required.$)$

$3.$ Calculate the total applied overhead for the year.

Was overhead over$-$ or underapplied? By how much?

$4.$ Calculate adjusted Cost of Goods Sold after adjusting for the overhead variance.