A company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, the company estimated total manufacturing overhead cost at $$838,000$ and total direct labor hours of $41,900.$ During the year, actual manufacturing overhead incurred was $$764,000$ and $39,600$ direct labor hours were used.

Required:

a$.$ Calculate the predetermined overhead rate.

b$.$ Calculate how much manufacturing overhead will be applied to production.

c$.$ Is overhead over$-$ or underapplied? By how much?

d$.$ What account should be adjusted for over$-$ or underapplied overhead? Should the balance be increased or decreased?

Complete this question by entering your answers in the tabs below.

Required A

Required B

Required C

Required D

Calculate the predetermined overhead rate.

Predetermined Overhead Rate

per hour