Question: The predetermined overhead allocation rate for Newton, Inc., is based on estimated direct labor costs of $400,000 and estimated factory overhead of $800,000. Actual costs

The predetermined overhead allocation rate for Newton, Inc., is based on estimated direct labor costs of $400,000 and estimated factory overhead of $800,000. Actual costs incurred were:

Indirect materials...................................

$17,000

Indirect labor.........................................

13,000

Direct materials.................................

75,000

Direct labor......................................

30,000

Advertising...............................

50,000

Factory depreciation..............................

17,000

Factory Property taxes...........................

12,000

Sales Commissions .........................................

100,500

(a)Calculate the predetermined overhead rateandcalculate the overhead applied during the year.

(b)Determine the amount of over- or underapplied overheadandstate whether it was under or overapplied.Prepare the journal entry to eliminate the over- or underapplied overhead.

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