Calculate the overapplied or underapplied overhead for the year and prepare a journal entry to close out the manufacturing overhead account into cost of goods soldthe following information pertains to paramus metal works for the year just ended. budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour actual direct-labor cost: 80,000 hours at $17.50 per hour budgeted manufacturing overhead: $997,500budgeted selling and administrative expenses: $435,000actual manufacturing overhead: depreciation $ 233,000 property taxes 22,000 indirect labor 82,000 supervisory salaries 201,000 utilities 57,000 insurance 32,000 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 i calculated the cost driver is 13.30 , can someone me with the following-1. calculate the overapplied or underapplied overhead for the yea2.prepare a journal entry to close out the manufacturing overhead account into cost of goods sold

Explanation:

1) Calculate the over-applied or under-applied overhead for the year.

Applied overhead =

Actual manufacturing overhead −Applied manufacturing overhead

=$1,008,000−($13.3×80,000)

=$1,008,000−$1,064,000

=−$56,000 (Over−applied)

Therefore, the over-applied overhead for the year is $56,000.

Working notes:

Calculate the pre-determined overhead rate:

Pre−determined  overheadrate  =

Budgeted manufacturing overhead / ( Budgeted direct−labor hours)

=  $997,500 / 75,000

=$13.3perhour

Therefore, the pre-determined overhead rate is $13.3 per hour.

Calculate the actual manufacturing overhead (check the image attached)

2. The journal entry is attached as a image too

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