1 - Storm Concert Promotions: Determine whether overhead is overapplied or underapplied.

2 - Storm Concert Promotions: Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.

3 - Valle Home Builders: Determine whether overhead is overapplied or underapplied.

4 - Valle Home Builders: Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.

Storm Concert Promotions Valle Home Builders

Actual indirect materials costs $12,800 $6,800

Actual indirect labor costs $55,500 $47,000

Other overhead costs $17,100 $49,000

Overhead applied $91,600 $98,400

Answer and Explanation:

1. The overhead is overapplied or underapplied is shown below:-

Valle Home Storm:

Particulars Amount

Indirect materials $12,800 $91,600 Applied overhead

Indirect Labor $55,500

Other overhead costs $17,100

$85,400 $6,200 Over applied overhead

2. The Journal entry is shown below:-

Factory overhead Dr, $6,200

To Cost of goods sold $6,200

(Being overapplied overhead is recorded)

3. The overhead is overapplied or underapplied is shown below:-

Valle Home Builders:

Indirect materials $6,800 $98,400 Applied overhead

Indirect Labor $47,000

Other overhead costs $49,000

Underapplied overhead $4,400

4. The Journal entry is shown below:-

Cost of goods sold Dr, $4,400

To Factory overhead $4,400

(Being under applied is recorded)