Crafton Corporation Applies Overhead at the Rate of 70 Percent

Essay

Crafton Corporation applies overhead at the rate of 70 percent of direct labor.Crafton incurred $450,000 of direct labor during the current year.Crafton incurred actual overhead of $367,000.
(a)Compute the amount of under- or overapplied overhead for Crafton Corporation for the current year
(b)Prepare the necessary journal entry to dispose of the under- or overapplied overhead (assuming that the amount is immaterial).