At the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following estimates: overhead costs, $2,430,000, and direct labor costs, $450,000. At year-end, the company's actual overhead costs for the year are $2,419,700 and actual direct labor costs for the year are $450,000. 1. Determine the predetermined overhead rate using estimated direct labor costs. 2. Enter the actual overhead costs incurred and the amount of overhead cost applied to movies during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

Please complete all three parts (refer to picture for info).

At the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following
estimates: overhead costs, $2,430,000, and direct labor costs, $450,000. At year-end, the company's actual overhead costs for the
year are $2,419,700 and actual direct labor costs for the year are $450,000.
1. Determine the predetermined overhead rate using estimated direct labor costs.
2. Enter the actual overhead costs incurred and the amount of overhead cost applied to movies during the year using the
predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year.
3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Determine the predetermined overhead rate using estimated direct labor costs.
Numerator:
1
1
1
Overhead Rate
Denominator:
< Required 1
=
=
=
Overhead Rate
Overhead rate
Required 2
>
Transcribed Image Text:At the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following estimates: overhead costs, $2,430,000, and direct labor costs, $450,000. At year-end, the company's actual overhead costs for the year are $2,419,700 and actual direct labor costs for the year are $450,000. 1. Determine the predetermined overhead rate using estimated direct labor costs. 2. Enter the actual overhead costs incurred and the amount of overhead cost applied to movies during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the predetermined overhead rate using estimated direct labor costs. Numerator: 1 1 1 Overhead Rate Denominator: < Required 1 = = = Overhead Rate Overhead rate Required 2 >
At the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following
estimates: overhead costs, $2,430,000, and direct labor costs, $450,000. At year-end, the company's actual overhead costs for the
year are $2,419,700 and actual direct labor costs for the year are $450,000.
1. Determine the predetermined overhead rate using estimated direct labor costs.
2. Enter the actual overhead costs incurred and the amount overhead cost applied to movies during the year using the
predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year.
3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Enter the actual overhead costs incurred and the amount of overhead cost applied to movies during the year using the
predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year.
Factory Overhead
< Required 1
Required 3
>
Transcribed Image Text:At the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following estimates: overhead costs, $2,430,000, and direct labor costs, $450,000. At year-end, the company's actual overhead costs for the year are $2,419,700 and actual direct labor costs for the year are $450,000. 1. Determine the predetermined overhead rate using estimated direct labor costs. 2. Enter the actual overhead costs incurred and the amount overhead cost applied to movies during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Enter the actual overhead costs incurred and the amount of overhead cost applied to movies during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. Factory Overhead < Required 1 Required 3 >
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education