(c) Determine the amount of overhead that is over/underapplied.

Finance Basics

Bubba’s Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $2,250,000 and direct labor hours are budgeted at 415,000 hours. Actual overhead was $2,200,000 and actual overhead hours worked were 422,000.

(a) Calculate the predetermined overhead rate.
(b) Calculate the overhead applied.
(c) Determine the amount of overhead that is over/underapplied.

 

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