Pure 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 Don't use plagiarized sources. Get Your Custom Essay on determine whether the overhead was under or overapplied and by how much 608794 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! Just from $10/Page | $920,000 |
| Actual overhead | $942,800 |
| Estimated 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.
(c)Determine whether the overhead was under- or overapplied and by how much.
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