Problem 7-41 Analysis of Overhead Using a Predetermined Rate (LO 7-3) UCD Company uses a job costing accounting system for its production costs. A predetermined overhead rate based on direct labor-hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows: Direct labor-hours 30,200 40,200 50,500 Variable overhead costs $ 332,200 $ 442,200 $ 555,500 Fixed overhead costs 500,900 500,900 500,900 Total overhead $ 833,100 $ 943,100 $ 1,056,400 The expected volume is 40,200 direct labor-hours for the entire year. The following information is for October, when jobs 1011 and 1015 were completed. Inventories, October 1 Raw materials and supplies $ 42,600 Work in process (Job 1011) 92,200 Finished goods 229,000 Purchases of raw materials and supplies Raw materials 630,600 Supplies 79,800 Materials and supplies requisitioned for production Job 1011 279,500 Job 1015 233,100 Job 1017 45,700 Supplies 74,900 $633,200 Machine-hours (MH) Job 1011 6,211 MH Job 1015 6,112 MH Job 1017 3,712 MH Direct labor-hours (DLH) Job 1011 14,050 DLH Job 1015 6,170 DLH Job 1017 3,730 DLH Labor costs Direct labor wages (all hours @ $11) $263,450 Indirect labor wages (12,800 hours) 67,200 Supervisory salaries 126,600 Building occupancy costs (heat, light, depreciation, etc.) Factory facilities 35,400 Sales and administrative offices 14,020 Factory equipment costs Power 21,800 Repairs and maintenance 8,170 Other 9,740 $ 39,710 (Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $23.96 per direct labor-hour. Use this amount in answering requirements [b] through [e].) Required: (a) Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year. (Round your intermediate computations and final answers to nearest whole dollar value.) (b) Compute the total cost of Job 1011 when it is finished. (Round your intermediate computations and final answers to nearest whole dollar value.) (c) How much of factory overhead cost was applied to Job 1017 during October? (Round your intermediate computations and final answers to nearest whole dollar value.) (d) What total amount of overhead was applied to jobs during October? (Round your intermediate computations and final answers to nearest whole dollar value.) (e) Compute actual factory overhead incurred during October. 10_24_2012 (f) At the end of the year, UCD Company had the following account balances: (Leave no cells blank - be certain to enter "0" wherever required.) Balance Underapplied Overhead $ 4,500,000 Cost of Goods Sold 3,150,000 Work-in-Process Inventory 450,000 Finished Goods Inventory 900,000 How would you recommend treating the underapplied overhead? Show the effect on the account balances in the following table:

Underapplied overhead

Cost of goods sold

WIP Inventory

Finished Goods Inventory