Chapter 19, Problem 12E

To determine

Introduction:

Overhead cost is an indirect cost. Overhead Cost that would be incurred during the year cannot be known at the beginning of the year. Therefore, a reliable estimate is to be made based on the budgeted overhead.
To apply overhead cost to a specific job, an estimate is made by the managers at the beginning of the accounting period known as predetermined overhead rate.

To Determine:

Journal Entries to close over or under applied factory overhead to cost of goods sold