In December 2010, Gomez Company 2019s manager estimated next year 2019s total direct labor cost assuming 50 persons working an average of 2,020 hours each at an average wage rate of $15 per hour. The manager also estimated the following manufacturing overhead costs for year 2011.
|
Indirect labor
|
$
|
167,950
|
|
Factory supervision
|
|
127,000
|
|
Rent on factory building
|
|
74,000
|
|
Factory utilities
|
|
44,400
|
|
Factory insurance expired
|
|
34,500
|
|
Depreciation % 2014 Factory equipment
|
|
240,000
|
|
Repairs expense % 2014 Factory equipment
|
|
31,900
|
|
Factory supplies used
|
|
35,900
|
|
Miscellaneous production costs
|
|
17,000
|
|
Total estimated overhead costs
|
$
|
772,650
|
| |
|
|
| |
|
At the end of 2011, records show the company incurred $747,062 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $364,000; Job 202, $331,000; Job 203, $168,000; Job 204, $423,000; and Job 205, $189,000. In addition, Job 206 is in process at the end of 2011 and had been charged $11,200 for direct labor. No jobs were in process at the end of 2010. The company 2019s predetermined overhead rate is based on direct labor cost.
|
Job No.
|
Direct labor cost
|
Predetermined overhead rate
|
Applied Overhead
|
|
201
|
364000
|
0.51
|
185640
|
|
202
|
331000
|
0.51
|
168810
|
|
203
|
168000
|
0.51
|
85680
|
|
204
|
423000
|
0.51
|
215730
|
|
205
|
189000
|
0.51
|
96390
|
|
206
|
11200
|
0.51
|
5712
|
|
Total
|
|
|
757962
|
|
Total
|
$
|
|
|
| |
|
|
|
| |
|
|
Required
1a. Determine the predetermined overhead rate for year 2011. (Omit the "%" sign in your response.) Predetermined overhead rate %
1b. Determine the total overhead cost applied to each of the six jobs during year 2011. (Omit the "$" sign in your response.)
1c. Determine the over- or underapplied overhead at year-end 2011. (Input all amounts as positive values.Omit the "$" sign in your response.)
2 Assuming that any over- or underapplied overhead is not material, prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold at the end of year 2011. (Omit the "$" sign in your response.)