Prepare entry to close any over- or underapplied overhead

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At the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following estimates: overhead costs, $1,968,000, and direct labor costs, $480,000. At year-end, the company's actual overhead costs for the year are $1,957,700.

Problem 1. Determine the predetermined overhead rate using estimated direct labor costs.

Problem 2. Enter the actual overhead costs incurred and the amount of overhead cost applied to movies during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year.

Problem 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.

Reference no: EM132982875

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