Question - The predetermined overhead allocation rate for Harris, Inc., is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000. Actual cost incurred were:
Direct material $250,000
Direct labor 410,000
Indirect material 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 allocation rate. (Show calculation.)
b. Calculate the overhead cost applied during the year. (Show calculation.)
c. Determine the amount of over- or underapplied overhead. (Show calculation.)
d. Prepare thejournal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount. (Show calculation.)