At the beginning of the year, Infodeo established its predetermined overhead rate for movies produced during the year by using the following cost predictions: overhead costs, $1,680,000, and direct labor costs, $480,000. At year-end, the company's records show that actual overhead costs for the year are $1,652,000. Actual direct labor costs had been assigned to jobs as follows.
Movies completed and released $ 425,000
Movies still in production 50,000
Total actual direct labor cost $ 475,000
a. Determine the predetermined overhead rate for the year 2017.
b. Determine whether overhead is overapplied or underapplied during the year.
c. Prepare the adjusting entry to allocate any over - or underapplied overhead to Cost of Goods Sold.
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Home » Business » At the beginning of the year, Infodeo established its predetermined overhead rate for movies produced during the year by using the following cost predictions: overhead costs, $1,680,000, and direct labor costs, $480,000.