Factory overhead for the Praeger Company has been estimated as follows: Fixed ov

Question

Factory overhead for the Praeger Company has been estimated as follows:

    Fixed overhead

$122,500

    Variable overhead

$90,000

    Budgeted direct labor hours

42,500

Production for the month was 90% of the budget, and actual factory overhead tota;ed 175,000$

Calculate:

a) The predetermined factory overhead rate

b)the under or overapplied factory overhead

PLEASE SHOW ALL the necessary steps and work !

    Fixed overhead

$122,500

    Variable overhead

$90,000

    Budgeted direct labor hours

42,500

Explanation / Answer

fixed overhead 122500     Variable overhead 90000 total 212500 total for 90% 191250     Budgeted direct labor hours 42500 predetermined rate 4.5 (191250/42500) Actual overhead 175000 Budgeted overhead 191250 Under applied -16250

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