Selected data for the consulting department of Austin Consulting. Inc. follow:
Estimated consulting overhead cost for the year $405,000
Estimated direct labor cost for the year ($9/hr.) 450,000
Actual manufacturing overhead cost for January 24,000
Actual direct labor cost for January (1,200 hours) 16,500
Assuming that direct labor cost is the basis for applying consulting overhead,
a. Calculate the predetermined overhead rate.
b. Prepare a journal entry that applies consulting overhead for January.
c. By what amount is consulting overhead over- or underapplied in January?
