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Cullumber Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate
Cullumber Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is
treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for
the current year.
Estimated overhead costs $
Actual overhead costs $
Estimated decorator hours
Actual decorator hours
The company uses the account Operating Overhead in place of Manufacturing Overhead, and the account Service Contracts in
Process in place of Work in Process Inventory.
Compute the predetermined overhead rate.
Predetermined overhead rate $ per decorator hour
Prepare the entry to apply the overhead for the year. List all debit entries before credit entries. Credit account titles are automatically
indented when amount is entered. Do not indent manually.
Account Titles and Explanation
Debit
Credit
Determine whether the overhead was under or overapplied and by how much.
Overhead $
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