Exercise 19-25 (Algo) Closing over- or underapplied overhead LO P4

	Star Promotions	Valle Builders
Indirect materials	$ 12,700	$ 6,700
Indirect labor	56,900	47,400
Other overhead	16,200	49,700
Overhead applied	92,400	98,000

Star Promotions 1-a. Determine whether overhead is overapplied or underapplied. 1-b. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold. Valle Builders 2-a. Determine whether overhead is overapplied or underapplied. 2-b. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.

---

At the beginning of the year, Custom Manufacturing set its predetermined overhead rate using the following estimates: overhead costs, $360,000, and direct materials costs, $200,000.At year-end, the company reports that actual overhead costs for the year are $368,900. 1. Determine the predetermined overhead rate using estimated direct materials costs 2. Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.