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Koebel Corporation uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year,
Koebel Corporation uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Koebel Corporation estimated total manufacturing overhead cost at $ and total direct labor hours of Koebel Corporation started the year with no beginning balances in elther Work in Process Inventory or Finished Goods Inventory. During the year, actual manufacturing overhead incurred was $ and direct labor hours were used.
Required:
a Calculate the predetermined overhead rate.
b Calculate how much manufacturing overhead will be applied to production.
c Is overhead over or underapplied? By how much?
d What account should be adjusted for over or underapplied overhead? Should the balance be increased or decreased?
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