Q#6

The predetermined overhead allocation rate for Forsythe, Inc., is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000. Actual costs incurred were:

Direct materials..	$250,000
Direct labor..	410,000
Indirect materials	55,000
Indirect labor..	125,000
Sales commissions.	50,000
Factory depreciation	170,000
Property taxes, factory...	15,000
Factory utilities..	35,000
Advertising.....	62,500
Factory equipment rental	100,000

(a) Calculate the predetermined overhead rate and calculate the overhead applied during the year. (b) Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.