At the beginning of the year, Learer Company's manager estimated total direct labor cost to be $2,510,000. The manager also estimated the following overhead costs for the year. Indirect labor Rent on factory building Factory utilities Depreciation-Factory equipment Repairs expense-Factory equipment Indirect materials Total estimated overhead costs $ 560,200 141,000 157,000 481,000 61,000 105,800 $ 1,506,000 For the year, the company incurred $1,523,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $605,000; Job 202, $564,000; Job 203, $299,000; Job 204, $717,000; and Job 205, $315,000. In addition, Job 206 is in process at the end of the year and had been charged $18,000 for direct labor. No jobs were in process at the beginning of the year. The company's predetermined overhead rate is based on a percent of direct labor cost. Required 1-a. Determine the predetermined overhead rate for the year. 1-b. Determine the overhead applied to each of the six jobs during the year. 1-c. Determine the over- or underapplied overhead at the year-end. 2. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold at year-end.

At the beginning of the year, Learer Company's manager estimated total direct labor cost to be $2,510,000. The manager also estimated the following overhead costs for the year. Indirect labor Rent on factory building Factory utilities Depreciation-Factory equipment Repairs expense-Factory equipment Indirect materials Total estimated overhead costs $ 560,200 141,000 157,000 481,000 61,000 105,800 $ 1,506,000 For the year, the company incurred $1,523,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $605,000; Job 202, $564,000; Job 203, $299,000; Job 204, $717,000; and Job 205, $315,000. In addition, Job 206 is in process at the end of the year and had been charged $18,000 for direct labor. No jobs were in process at the beginning of the year. The company's predetermined overhead rate is based on a percent of direct labor cost. Required 1-a. Determine the predetermined overhead rate for the year. 1-b. Determine the overhead applied to each of the six jobs during the year. 1-c. Determine the over- or underapplied overhead at the year-end. 2. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold at year-end.

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Description: At the beginning of the year, Learer Company's manager estimated total direct labor cost to be $2,510,000. The manager alsoestimated the following overhead costs for the year.Indirect labor.Rent on factory buildingFactory utilitiesDepreciation-Facto

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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