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4-3 Unit Cost; Plantwide Over- head Rate; Applied Overhead LOI, LO2 Randall Associates produces carburetors for small engines and uses a normal cost- ing system.
4-3 Unit Cost; Plantwide Over- head Rate; Applied Overhead LOI, LO2 Randall Associates produces carburetors for small engines and uses a normal cost- ing system. The following data are available for 2004: Budgeted: Overhead $900,000 Machine hours 37,500 Direct labor hours 120,000 Actual: Units produced 150,000 Overhead $893,250 Prime costs $1,350,000 Machine hours 37,575 Direct labor hours 117,000 Spreadsheet 4-4 Unit Overhead Cost; Pre- determined Plant Overhead Rate; Applied Overhead LOI, LO2 Overhead is applied on the basis of direct labor hours. Required 1. What is the predetermined overhead rate? 2. What is the applied overhead for 2004? 3. Was overhead overapplied or underapplied, and by how much? 4. What is the unit cost for the year? Using the information from Exercise 4-3, suppose Randall Associates applies over- head to production on the basis of machine hours instead of direct labor hours. Required 1. What is the predetermined overhead rate? 2. What is the applied overhead for 2004? 3. Is overhead over- or underapplied, and by how much? 4. What is the unit cost? 5. How can Randall Associates decide whether to use direct labor hours or machine hours as the basis for applying overhead? of precision machine parts uses a prede
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