At the end of the year, the company assembled the following actual cost data rel

Question

At the end of the year, the company assembled the following actual cost data relating to all jobs worked on during the year: Compute the underapplied or overapplied overhead for the year, assuming that a plantwide overhead rate is used. (Round your answer to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.) Compute the underapplied or overapplied overhead for the year, assuming that departmental overhead rates are used. (Input all amounts as positive values. Omit the "$" sign in your response.)

Explanation / Answer

1.Compute the underapplied or overapplied overhead for the year, assuming that a plantwide overhead rate is used.

Plantwide overhead rate   = $1,443,010 / 901,000 = $1.60

Manufacturing overhead applied      901,000 x $1.70     $1,443,010
Actual manufacturing overhead                                    $1,484,000   
Under  applied                                                             $40,900
                              
2.Compute the underapplied or overapplied overhead for the year, assuming that departmental overhead rates are used.
                              Fabricating  Machining   Assembly     Total
Manuf.OH applied    $537,000     $806,010     100,000 $1,443,010
Actual                      $561,000     $830,000     $93,000   $1,484,000   
Under applied            $24,000      $23,990                          $40,990
Over applied                                                 $7,000                             

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