Analyze the Over- Underapplied Overhead (Appendix): Assume the following facts:

Required:

a. Compute the predetermined overhead rate.

b. What is the expected manufacturing overhead for each of the following levels of activity:

1 . 800 direct labor-hours?

2. 1 ,000 direct labor-hours?

3. 1,200 direct labor-hours?

c. During Year 1, the company works 800 direct labor-hours on Job 21 and 400 direct labor-hours on Job 22. The actual manufacturing overhead was $37,000. What is the amount of overhead applied to each job?

d. What is the:

1. Total under- or overapplied overhead?

2. Spending variance?

3. Production volume variance?

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Estimated manufacturing overhead for Year I $30,000 ($10 x Direct labor-hours). Estimated direct labor-hours for Year 1 = 1,000 hours.