At the beginning of the year, Paxton Company budgeted overhead of $180,000 as well as 15,000 direct labor hours. During the year, Job K456 was completed with the following information: direct materials cost, $2,340; direct labor cost, $3,600. The average wage for Paxton Company employees is $10 per hour.

By the end of the year, 15,400 direct labor hours had actually been worked, and Paxton Company incurred the following actual overhead costs for the year:

Equipment lease ...........$ 5,000

Depreciation on building ..........20,000

Indirect labor ..............100,000

Utilities ................15,000

Other overhead .............45,000

Required:

1. Calculate the overhead rate for the year.

2. Calculate the total cost of Job K456.

3. Prepare the journal entries to record actual overhead and to apply overhead to production for the year.

4. Is overhead overapplied or underapplied? By how much?

5. Assuming that the normal cost of goods sold for the year is $700,000, what is the adjusted cost of goods sold?