E3-1A. Calculate and Use Overhead Rate Selected data for the consulting department of Austin Consulting Inc., follow:

Estimated consulting overhead cost for the year. . . . . . . . . . . . . . . . . . . . .$270,000

Estimated direct labor cost for the year (@ $9/hr.). . . . . . . . . . . . . . . . . . . . 180,000

Actual manufacturing overhead cost for January . . . . . . . . . . . . . . . . . . . . 16,000

Actual direct labor cost for January (1,200 hours). . . . . . . . . . . . . . . . . . . . 11,000

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

a . a. Calculate the predetermined overhead rate.

b .b. Prepare a journal entry that applies consulting overhead for January.

c . c. By what amount is consulting overhead over- or underapplied in January?