Mason Company and Rodd Company both apply overhead to the Work in Process Inventory account using direct labor hours. The following information is available for both companies for the year.
| Mason Company |
Rodd Company |
| Actual manufacturing overhead |
$ |
145,000 |
$ |
223,700 |
| Actual direct labor hours |
21,000 |
22,000 |
| Underapplied overhead |
12,500 |
| Overapplied overhead |
23,000 |
Required:
a. Compute the predetermined overhead rate for each company. (Round your answers to 2 decimal places.)
b. Using T-accounts, record applied and actual overhead and the entry to close the over applied or under applied overhead at the end of the accounting period for each company, assuming the amounts are immaterial.