In December 2010, Gomez Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,000 hours each at an average wage rate of $15 per hour. The manager also estimated the following manufacturing overhead costs for year 2011.

Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $159,600

Factory supervision . . . . . . . . . . . . . . . . . . . . . . . . 120,000

Rent on factory building . . . . . . . . . . . . . . . . . . . . 70,000

Factory utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,000

Factory insurance expired . . . . . . . . . . . . . . . . . . . 34,000

Depreciation—Factory equipment . . . . . . . . . . . . 240,000

Repairs expense—Factory equipment . . . . . . . . . 30,000

Factory supplies used . . . . . . . . . . . . . . . . . . . . . . 34,400

Miscellaneous production costs . . . . . . . . . . . . . . 18,000

Total estimated overhead costs . . . . . . . . . . . . . . $750,000

At the end of 2011, records show the company incurred $725,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $354,000; Job 202, $330,000; Job 203, $175,000; Job 204, $420,000; and Job 205, $184,000. In addition, Job 206 is in process at the end of 2011 and had been charged $10,000 for direct labor. No jobs were in process at the end of 2010. The company’s predetermined overhead rate is based on direct labor cost.

Required

1. Determine the following.

a. Predetermined overhead rate for year 2011.

b. Total overhead cost applied to each of the six jobs during year 2011.

c. Over- or under-applied overhead at year-end 2011.

2. Assuming that any over- or under-applied overhead is not material, prepare the adjusting entry to allocate any over- or under-applied overhead to Cost of Goods Sold at the end of year 2011.