Calculate and Use Overhead Rate$$

Selected data for the consulting department of Kingman Consulting Inc., follow:

Estimated consulting overhead cost for the year$$576,000$Estimated direct labor cost for the year $($@ $$9/$hr$.)324,000$Actual consulting overhead cost for May$29,000$Actual direct labor cost for May $(2,400$ hours$)22,000$

Assuming that direct labor hours is the basis for applying consulting overhead,

a$.$ Calculate the predetermined overhead rate. $Answer $1$

per direct labor hour

b$.$ Prepare a journal entry that applies consulting overhead for May.

General JournalDescriptionDebitCreditConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory

Consulting overheadCost of goods soldFinished goods inventoryWork in process inventory

c$.$ By what amount is consulting overhead over$-$or under$-$applied in May?

$Answer $8$Answer $9$under$-$appliedover$-$applied