Question

# In December 2016, Infodeo established its predetermined overhead rate for movies produced during 2017 by using...

In December 2016, Infodeo established its predetermined overhead rate for movies produced during 2017 by using the following cost predictions: overhead costs, \$2,450,000,and direct labor costs, \$490,000. At year-end 2017, the company’s records show that actual overhead costs for the year are \$2,228,500. Actual direct labor cost had been assigned to jobs as follows.

 Movies completed and released \$ 400,000 Movies still in production 48,000 Total actual direct labor cost \$ 448,000

1.
Determine the predetermined overhead rate for 2017.
2&3. Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.
4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.

 Overhead Rate Choose Numerator: / Choose Denominator: = Overhead Rate / = Overhead rate / = 0
 0 0
Date General Journal Debit Credit
Dec. 31

 Choose numerator / Choose denominator = Overhead rate Estimated overhead / Estimated activity base = Overhead rate 2450000 / 490000 = 500% of labor cost

 Manufacturing overhead 2228500 Work in process (448000*5) 2240000 Bal 11500

Journal entry

 Date account and explanation debit credit Manufacturing overhead 11500 Cost of goods sold 11500 (To record over applied overhead)

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