The predetermined overhead rate for Shilling Manufacturing is based on estimated direct labor costs of $350,000 and estimated factory overhead of $770,000.Actual costs incurred were:
a.Calculate the predetermined overhead rate and calculate the overhead applied during the year.
b.Prepare the journal entry to eliminate the over- or underapplied overhead,assuming that it is not material in amount.

Predetermined Overhead Rate

A rate used to assign overhead costs to products or jobs, calculated before the period begins based on an estimate of costs.

Overapplied Overhead

A scenario in which the overhead costs attributed to manufacturing exceed the overhead expenses that were actually incurred.

Underapplied Overhead

A situation where the allocated factory overhead costs are less than the actual overhead costs incurred, leading to a discrepancy in cost accounting.