Conrad Industries Uses a Predetermined Overhead Application Rate of $25

Essay

Conrad Industries uses a predetermined overhead application rate of $25 per labour hour. A review of the company's accounting records revealed budgeted manufacturing overhead for the period of $700,000, applied manufacturing overhead of $640,900, and overapplied overhead of $12,400.
Required:
A. Determine Conrad's actual labour hours, budgeted labour hours, and actual manufacturing overhead.
B. Present the necessary year-end journal entry to handle the overapplied overhead, assuming that the company allocates over- or underapplied overhead to Cost of Goods Sold.