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Question - Sunland 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 costs $827,200
Actual overhead costs $845,154
Estimated decorator hours 37,600
Actual decorator hours 38,070
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 Inventory.
Required -
(a) Compute the predetermined overhead rate.
(b) Prepare the entry to apply the overhead for the year. (List all debit entries before credit entries.
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