Irmaâ€™s Interiors uses a
job order costing system to collect the costs of its interior decorating
business. Each clientâ€™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.
hours â€¦â€¦.. 40,000
hours â€¦â€¦â€¦â€¦ 40,500
The company uses
Operating Overhead in place of Manufacturing Overhead.
(a) Compute the
predetermined overhead rate.
(b) Prepare the
entry to apply the overhead for the year.
whether the overhead was under- or overapplied and by how much.