The predetermined overhead allocation rate for Forsythe, Inc. is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000. Actual costs incurred were:
Direct materials........................................................................$250,000
Direct labor...............................................................................410,000
Indirect materials.........................................................................55,000
Indirect labor.............................................................................125,000
Sales commissions.......................................................................50,000
Factory depreciation..................................................................170,000
Property taxes, factory.................................................................15,000
Factory utilities..........................................................................35,000
Advertising..............................................................................62,500
Factory equipment rental............................................................100,000
(A). Calculate the predetermined overhead rate and calculate the overhead applied during the year.(B). Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.