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Question - Tomber't Decorating uses a job order cost 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.
Estimated overhead $1,040,000
Actual overhead $1,039,800
Estimated decorator hours 40,000
Actual decorator hours 39,500
The company uses the account Operating Overhead in place of Manufacturing Overhead and the account Service Contracts in Process in place of Work in Process.
Required - Compute the predetermined overhead rate.
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