The following information pertains to Paramus Metal Works for the year just ended. Budgeted direct-l 1 answer below »

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The following information pertains to Paramus Metal Works for the year just ended.

  Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour

  Actual direct-labor cost: 80,000 hours at $17.50 per hour

  Budgeted manufacturing overhead: $997,500

  Budgeted selling and administrative expenses: $438,000

  Actual manufacturing overhead:       Depreciation            $ 234,000           Property taxes 22,000           Indirect labor 81,000           Supervisory salaries 202,000           Utilities 58,000           Insurance 33,000           Rental of space 302,000           Indirect material (see data below) 79,000    

  Indirect material:       Beginning inventory, January 1 47,000           Purchases during the year 95,000           Ending inventory, December 31 63,000

1.

Compute the firmAc€?cs predetermined overhead rate, which is based on direct-labor hours. (Round your answer to 2 decimal places.)

2. Calculate the overapplied or underapplied overhead for the year.

3.

Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)

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