Question: Falcon Corp. uses a predetermined overhead rate based on direct labor hours. Falcon applied $240,000 of overhead to jobs during the year. The actual overhead

Falcon Corp. uses a predetermined overhead rate based on direct labor hours. Falcon applied $240,000 of overhead to jobs during the year. The actual overhead was $215,000 for the year. The WIP ending inventory was $375,000. The finished goods inventory was $200,000 and the COGS was $800,000.

Required:

A. Make the journal entries to close the over/under applied overhead out to COGS.

B. Make the journal entries to prorate the over/under applied overhead.

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