The predetermined overhead rate for Foster,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)Prepare the journal entry to eliminate the over- or underapplied overhead,assuming that it is not material in amount.
Definitions:
After-tax Cost
The expense of an action or transaction after considering the impact of taxes.
Dividend
A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Growth Rate
The percentage increase in a company's revenue or earnings from one period to the next, demonstrating how quickly it is expanding.
Market Price
The amount for which something can be sold on a given market at a specific point in time.
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