Compute the firm predetermined overhead rate

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Reference no: EM132217207

Question - The following information pertains to Glass Works Company for 2014.

Budgeted direct-labour cost: 75,000 hours at $16 per hour

Actual direct-labour cost: 80,000 hours at $17.50 per hour.

Budgeted Manufacturing Overhead: $ 997,500

Actual Manufacturing Overhead:

Depreciation $ 240,000

Property Taxes 12,000

Indirect Labour 82,000

Supervisory Salaries 200,000

Utilities 59,000

Insurance 30,000

Rental of Space 300,000

Indirect Material 79,000

Required

(i) Compute the firm's predetermined overhead rate, which is based on direct-labour hours.

(ii) Calculate the overapplied or underapplied overhead for 2014.

(iii) Prepare a journal entry to close out the Manufacturing Overhead Account into Cost of Goods Sold.

Reference no: EM132217207

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