Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 52

Application of Overhead Tomek Company uses a job costing system that applies factory overhead on the basis of direct labor-hours. The company's factory overhead budget for 2013 included the following estimates:

Required
1. Compute the firm's predetermined factory overhead rate for 2013.
2. Calculate the amount of overapplied or underapplied overhead.
3. Prepare a journal entry to transfer the underapplied or overapplied overhead to the Cost of Goods Sold account.