Compute the predetermined overhead rate prepare the entry

Reference no: EM13392279

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.

Reference no: EM13392279

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