The predetermined overhead allocation rate for Forsythe,Inc.,is based on estimated direct labor costs of $400,000 and estimated factory overhead of $500,000.Actual costs incurred were:
(a)Calculate the predetermined overhead rate and calculate the overhead applied during the year.
(b)Determine the amount of over- or underapplied overhead and prepare the journal entry to eliminate the over- or underapplied overhead assuming that it is not material in amount.
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