E3-1B. Calculate and Use Overhead Rate Selected data for the consulting department of Kingman Consulting, Inc., follow:

Estimated consulting overhead cost for the year. . . . . . . . . . . . . . . . $405,000

Estimated direct labor cost for the year (@ $9/hr.). . . . . . . . . . . . . . . 324,000

Actual consulting overhead cost for May. . . . . . . . . . . . . . . . . . . . . . 26,000

Actual direct labor cost for May (2,400 hrs.) . . . . . . . . . . . . . . . . . . . $ 22,000

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

a.) Calculate the predetermined overhead rate.

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

c.) By what amount is consulting overhead over- or underapplied in May?