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
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.
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.)