(LO 3, 5) Kwik Kopy Company applies operating overhead to photocopying jobs on the basis of machine hours used. Overhead costs are estimated to total $290,000 for the year, and machine usage is estimated at 125,000 hours.
For the year, $295,000 of overhead costs are incurred and 130,000 hours are used.
Instructions
a. Compute the service overhead rate for the year.
b. What is the amount of under- or overapplied overhead at December 31?
c. Assuming the under- or overapplied overhead for the year is not allocated to inventory accounts, prepare the adjusting entry to assign the amount to cost of jobs finished.
Compute the overhead rate and under- or overapplied overhead.
