Cost Accounting: 4-34 Tomek Company uses a job costing system that applies

Cost Accounting

4-34 Application of Factory Overhead
Tomek Company uses a job costing system that applies factory overhead on the basis of direct-labor hours. The company’s factory overhead budget for 2010 included the following estimates:
Budgeted total factory overhead 568,000
Budgeted Total direct labor- hours 71,000
At the end of the year the company shows these results:
Actual Factory overhead 582,250
Actual direct labor-hours 71,500
The following amounts of the years applied factory overhead remained in the various manufacturing accounts
Work in Process inventory 139,000
Finished Goods Inventory 216,840
Cost of Goods sold 200,160

Required:
1. Compute the firm’s predetermined factory overhead rate for 2010.
2. Calculate the amount of overapplied or underapplied overhead.
3. Prepare a journal entry to transfer the underapplied or overapplied overhead to the Cost of Goods Sold Account (do not use proration)
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