At the beginning of the year, Beachfront, Inc. established its predetermined overhead rate for applying factory...

 

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At the beginning of the year, Beachfront, Inc. established its predetermined overhead rate for applying factory overhead to its inventory produced during the year by using the following predicted costs: • Estimated Factory Overhead $1,500,000 • Estimated Direct Labor $1,250,000 At year-end, the company's records show the following actual costs: $1,460,000 $1,200,000 Actual Factory Overhead • Actual Direct Labor . Required: (a) Calculate the predetermined overhead rate for the year. (b) Calculate the amount of factory overhead costs applied to Work in Process Inventory during the year. (c) Calculate the amount of overapplied or underapplied overhead (indicate whether it is overapplied or underapplied). (d) Prepare the adjusting journal entry to close out the overapplied or underapplied overhead, assuming that the amount is immaterial. At the beginning of the year, Beachfront, Inc. established its predetermined overhead rate for applying factory overhead to its inventory produced during the year by using the following predicted costs: • Estimated Factory Overhead $1,500,000 • Estimated Direct Labor $1,250,000 At year-end, the company's records show the following actual costs: $1,460,000 $1,200,000 Actual Factory Overhead • Actual Direct Labor . Required: (a) Calculate the predetermined overhead rate for the year. (b) Calculate the amount of factory overhead costs applied to Work in Process Inventory during the year. (c) Calculate the amount of overapplied or underapplied overhead (indicate whether it is overapplied or underapplied). (d) Prepare the adjusting journal entry to close out the overapplied or underapplied overhead, assuming that the amount is immaterial.

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a Calculating the Predetermined Overhead Rate The predetermined overhead rate is calculated by divid... View the full answer