In December 2008, Dreamvision established its predetermined overhead rate for movies produced during year 2009 by using the following cost predictions: overhead costs, $1,500,000, and direct labor costs, $430,000. At year end 2009, the company's records show that actual overhead costs for the year are $1,790,000. Actual direct labor cost had been assigned to jobs as follows.
- Movies completed and released $200,000
- Movies still in production 54,000
- Total actual direct labor cost $254,000
- Determine the predetermined overhead rate for year 2009. (Round your answer to the nearest whole percent.
- Enter the overhead costs incurred and the amounts applied to movies during the year using the predetermined overhead rate in the T-account provided below.
- Determine whether overhead is overapplied or underapplied (and the amount) during the year.
- Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.