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1. Compute the overhead allocation rate.

2. Calculate the balance in ending work in process and cost of goods sold before any adjustments for under- or overallocated overhead.

3. Calculate under- or overallocated overhead.

4. Calculate the ending balances in work in process and cost of goods sold if the under- or overallocated overhead amount is as follows: a. Written off to cost of goods sold b. Prorated using the overhead allocated in 2017 (before proration) in the ending balances of cost of goods sold and work-in-process control accounts

5. Which of the methods in requirement 4 would you choose? Explain.

InStep prints custom training material for corporations. The business was started January 1, 2017. The company uses a normal-costing There were two jobs in process on December 31, 2017: Job 11 and Job 12. Costs added to each job as of Decamber 31 are as follows: system. It has two direct-cost pools, materials and labor, and one indirect-cost pool, overhead. Overhead is charged to printing jobs on the basis of direct labor cost The following information is available for 2017 lick the icon to view the costs.) InStep has no finished-goods inventories because all printing jobs are transferred to cost of goods sold when completed. EEE Click the ioon to view the following data.) Read the requiraments Requirement 1. Compute the overhead alocation rate. Select the formula and enter the amounts to calculate the overhead allocation rate. (Enter the rate in decimal format to one decimal place, X.X. Do not enter the rate as a percentage Budgeted overhead costs Budgeted direct labor costs 200,000 Overhead alocation rate 260,000 Data Table Requirement 2. Calculate the balanca in ending work in prooess and cost of goods sold before any adjustments for under-or overallocated owerhead Begin by calculating ending work in process before any adjustments for under-or overallocated overhead. Job 11 Job 12 Total Cost Direct materials Direct materials Direct labor Ovarhead Ending work in process Direct labor S6,300 S6,100 Data Table ob 11 4270 Job 12 S 5.180 PrintDone Budgeted direct labor costs Budgeted overhead costs Costs of actual material used Actual direct labor costs Actual overhead costs 200,000 260,000 49.000 183.000 246.500 Print Done

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