Selected cost data for Classic Print Co. are as follows:
Estimated manufacturing overhead cost for the year ................... $ 125,000
Estimated direct labor cost for the year ....................................... 78,125
Actual manufacturing overhead cost for the year ......................... 116,000
Actual direct labor cost for the year ........................................... 67,000
Requirements
1. Compute the predetermined overhead allocation rate per direct labor dollar.
2. Prepare the journal entry to allocate overhead costs for the year.
3. Use a T-account to determine the amount of under allocated or over allocated manufacturing overhead.
4. Prepare the journal entry to adjust for the under allocated or over allocated manufacturing overhead.