Cullumber Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Estimated overhead costs Actual overhead costs Estimated decorator hours Actual decorator hours $975,200 $995,976 42,400 42,930 The company uses the account Operating Overhead in place of Manufacturing Overhead, and the account Service Contracts in
Cullumber Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Estimated overhead costs Actual overhead costs Estimated decorator hours Actual decorator hours $975,200 $995,976 42,400 42,930 The company uses the account Operating Overhead in place of Manufacturing Overhead, and the account Service Contracts in
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please do not give solution in image format thanku
Transcribed Image Text:(A) Compute the predetermined overhead
rate per decorator hour
(B) Prepare the entry to apply the overhead
for the year.
(C) Determine whether the overhead was
under- or overapplied and by how much.
Transcribed Image Text:Cullumber Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client's consultation is
treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for
the current year.
Estimated overhead costs
Actual overhead costs
Estimated decorator hours
Actual decorator hours
$975,200
$995,976
42,400
42,930
The company uses the account Operating Overhead in place of Manufacturing Overhead, and the account Service Contracts in
Process in place of Work in Process Inventory.
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