Franklin Manufacturing Uses a Job Order Costing System That Charges

Essay

Franklin Manufacturing uses a job order costing system that charges overhead to jobs on the basis of direct labor cost.Franklin used the following cost predictions: overhead costs $1,285,750,and direct labor costs of $695,000.At year-end,the company's records show that actual overhead costs for the year are $1,278,800,and actual direct labor costs are $692,000.
a.Determine the predetermined overhead rate for the year.
b.Compute the amount of overapplied or underapplied overhead.
c.Prepare the adjusting entry for over- or underapplied overhead,assuming the amount is immaterial.