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6. Muscat Interior Decorators uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as
6. Muscat Interior Decorators uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Budgeted overhead $ 620,000 Actual overhead $591,400 Budgeted decorator hours 40,000 Actual decorator hours 40,250 The company uses Operating Overhead in place of Manufacturing Overhead. Required: a) Compute the predetermined overhead rate. (1 mark) b) Determine whether the overhead was under or over applied and by how much. (2 marks)
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