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Accounting

Fine & Associates is an interior decorating firm in Tucson. The following costs were incurred in a project to redecorate the mayor's offices:

Direct material $ 29,000
Direct professional labor 42,000

The firm's budget for the year included the following estimates:

Budgeted overhead $800,000
Budgeted direct professional labor 640,000

Overhead is applied to contracts by using a predetermined overhead rate that is based on direct professional labor cost. Actual professional labor during the year was $655,000 and actual overhead was $793,000.

Required:

A. Determine the total cost to redecorate the mayor's offices.

B. Calculate the under- or overapplied overhead for the year. Be sure to label your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9412934

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