Irma’s Interiors_Manufacturing Overheads

$14.00

Description

Irma’s Interiors uses a
job order costing system to collect the costs of its interior decorating
business. Each client’s consultation is treated as a separate job. Overhead is
applied to each job based on the number of decorator hours incurred. Listed
below are data for the current year.
Budgeted overhead
……….… $960,000
Actual overhead
………….…. $982,800
Budgeted decorator
hours …….. 40,000
Actual decorator
hours ………… 40,500
The company uses
Operating Overhead in place of Manufacturing Overhead.
Instructions
(a) Compute the
predetermined overhead rate.
(b) Prepare the
entry to apply the overhead for the year.
(c) Determine
whether the overhead was under- or overapplied and by how much.

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