Baxter Corp uses a normal job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Baxter Corp estimated total manufacturing overhead cost at $492,000 and total direct labor hours of 41,000. During the year actual manufacturing overhead incurred was $460,700 and 40,700 direct labor hours were used.
| (a) |
Calculate the predetermined overhead rate. (Omit the "$" sign in your response.) |
| Predetermined overhead rate |
$ |
| (b) |
Calculate how much manufacturing overhead will be applied to production. (Omit the "$" sign in your response.)
|
| Manufacturing overhead applied |
$ |
| (c) |
Is overhead over - or underapplied? By how much? (Input the amount as positive value. Omit the "$" sign in your response.)
|
| Overhead |
(Click to select)underapplied OR overapplied |
$ |
| (d) |
What account should be adjusted for over - or underapplied overhead? Should the balance be increased or decreased?
|
| (Click to select)Cost of goods sold OR Raw materials inventory OR Work in process inventory OR Finished goods inventory OR Manufacturing overhead |
(Click to select)increased OR decreased |