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, $1,840,000, and direct labor costs, $460,000. At year-end, the company’s actual overhead costs for the year are $1,829,800 and actual direct labor costs for the year are $460,000.Determine the predetermined overhead rate using estimated direct labor costs.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.Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.Please see picture for format. ---### Overhead Rate and Cost Application for ProductionAt the beginning of the year, Mirmax set its predetermined overhead rate for movies produced during the year by using the following estimates:- Overhead costs: $1,840,000- Direct labor costs: $460,000At year-end, the company's actual overhead costs for the year are $1,829,800 and actual direct labor costs for the year are $460,000.#### Task Breakdown: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.---**Instruction: Complete this question by entering your answers in the tabs below.**#### Required 1- Calculate the predetermined overhead rate.#### Required 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.#### Required 3- Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.---#### Data Entry Table: Factory Overhead| Type of Overhead | Cost ||---------------------------------------|------------------|| Actual Overhead Costs Incurred | [Enter amount] || Applied Overhead Costs | [Enter amount] || Overapplied or Underapplied Amount | [Enter amount] |---**Navigation Buttons:**- `< Required 1`- `Required 2 >`- `Required 3 >`---This exercise is designed to help students understand how to calculate and apply the predetermined overhead rate, as well as how to account for over- or underapplied overhead costs in a production setting.--- **Title: Overhead Cost Analysis for Mirmax Movies Production**---### Introduction: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: $1,840,000- Direct labor costs: $460,000At year-end, the company's actual overhead costs are $1,829,800 and the actual direct labor costs for the year are $460,000. ---### Tasks to be Completed: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.**---### Instructions:#### **Step 1: Determine the Predetermined Overhead Rate**To calculate the predetermined overhead rate, use the following formula:\[ \text{Overhead Rate} = \frac{\text{Estimated Overhead Costs}}{\text{Estimated Direct Labor Costs}} \]Fill out the table below with the provided estimates:**Overhead Rate Calculation:**\[ \frac{\text{\$1,840,000}}{\text{\$460,000}} = 4.00 \text{ (or 400%)} \]---#### **Step 2: Calculate the Applied Overhead and Determine Over/Underapplied Overhead**1. **Actual Overhead Costs Incurred:** - $1,829,8002. **Applied Overhead Cost:** Using the predetermined overhead rate (4.00), multiply by the actual direct labor cost: \[ \text{Applied Overhead Cost} = \text{Actual Direct Labor Cost} \times \text{Predetermined Overhead Rate} \] \[ \text{Applied Overhead Cost} = \$460,000 \times 4.00 = \$1,840,000 \]3. **Calculate Over/Underapplied Overhead:** \[ \text{Over/Underapplied Overhead} = \text{Actual Overhead Incurred} - \text{Applied Overhead Cost} \] Subtract the applied overhead cost from the actual overhead cost

Name: At the beginning of the year, Mirmax set its predetermined overhead ra
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: 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, $1,840,000, and direct labor costs, $460,000. At year-end, the company’s actual overhead co