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A company applies overhead at a rate of 155% of direct labor cost

Accounting

A company applies overhead at a rate of 155% of direct labor cost. Actual overhead cost for the current period is $918,500, and direct labor cost is $550,000 Determine whether there is over or underapplied overhead using the Taccount below. Factory Overhead 918.500 Actual overhead 918,000 Prepare the journal entry to close over or underapplied overhead to cost of goods sold. View transactions
Prepare the journal entry to close over or underapplied overhead to cost of goods sold. ook View transaction list Ent Journal entry worksheet Record the entry to close over- or underapplied overhead. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal

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Actual Overhead 918500 Applied overhead(550000 x 155%) 852500
    Underapplied overhead 66000
  918500   918500

General Journal

Debit

Credit

Cost of goods sold $66000  
Factory overhead   $66000
(To record closure of underapplied overhead)