Sydneys Bakery applies overhead on the basis of Bakers Direct Labour hours. The estimated Baker DL hours for the year are 1,500 hours. The estimated manufacturing overhead is $126,000. For the reporting period, the actual overhead costs totalled $132,480 and actual Baker DL hours were recorded as 1,560.

Operational results

Sydneys Bakery has provided you with activity and respective costs for three months below.

Based on the Operational Information provided in the case:

1. Calculate the pre-determined overhead rate (PDOHR)
2. Determine if manufacturing overhead (MOH) was over or under applied.
3. Develop the Journal Entry necessary to close out the manufacturing overhead account.

January February March 2,800 per unit 3,400 per unit 3,000 per unit $ 18,480 $ 6.60 $ 22,440 $ 6.60 $ 19,800 6.60 $ (6,160) $ (2.20) $ (7,480) $ (2.20) $ (6,600) $(2.20) $ 12,320 $ 14,960 $ 13,200 ] 3 Sales in units Sales revenue Less: COGS Gross Margin Less Operating XP Insurance Rent Dep'n Advertising Salaries Total Oper XP Net Income $ 800 $ 0.29 $ 800 $ 0.24 $ 800 $ 1,800 $ 0.64 $ 1,800 $ 0.53 $ 1,800 $ 700 $ 0.25 $ 700 $ 0.21 $ 700 $ 640 $ 0.23 $ 670 $ 0.20 $ 650 $ 7,100 $ 2.54 $ 7,850 $ 2.31 $ 7,350 $(11,040) $(11,820) $(11,300) $ 1,280 $ 3,140 $ 1,900 0.271 0.60 0.23 0.22 2.45 Pre-determined Overhead Rate (PDOHR) PDOHR = Estimated total overhead cost estimated total activity volume of allocation base PDOHR = #DIV/0! Applied = $ Actual = Under Applied by O Account title dr cr