Question
XYZ Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead
XYZ Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $15,500 and 2,500 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $21,000. The actual labor rate is $7.50 and the company paid a total of $21,750 for its actual direct labor usage.
The predetermined overhead rate for the year was
The applied manufacturing overhead for the year was closest to:
Was the overhead underapplied or overapplied? By how much?
Prepare journal entry to eliminate the underapplied or overapplied to Cost of Goods Sold account.
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