Sec 5

Exercise 15-14 Factory overhead computed, applied, and adjusted LO P3, P4

[The following information applies to the questions displayed below.]

In December 2012, Infovision established its predetermined overhead rate for movies produced during year 2013 by using the following cost predictions: overhead costs, $1,927,000, and direct labor costs, $470,000. At year end 2013, the companys records show that actual overhead costs for the year are $1,837,900. Actual direct labor cost had been assigned to jobs as follows.

1.	Determine the predetermined overhead rate for year 2013.

2&3.	Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied (and the amount) during the year.

4.	Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.

Movies completed and Movies still in production Total actual direct labor 400,000 releasec 51,000 $451,000 cost Overhead Rate Choose Numerator: Choose Denominator: Overhead Rate Overhead rate Factory Overhead Journal entry worksheet Record entry to close underapplied /overapplied overhead. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31 Record entry Clear entry View general journal