Blue Spruce Company produces one product, a putter called GO-Putter. Blue Spruce uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 82,000 units per year. The total budgeted overhead at normal capacity is $697,000 comprised of $205,000 of variable costs and $492,000 of fixed costs. Blue Spruce applies overhead on the basis of direct labor hours. During the current year, Blue Spruce produced 77,900 putters, worked 77,100 direct labor hours, and incurred variable overhead costs of $209,900 and fixed overhead costs of $492,000.

(a)

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Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.)

		Variable		Fixed
Predetermined Overhead Rate		$enter predetermined overhead rate in dollars rounded to 2 decimal places		$enter predetermined overhead rate in dollars rounded to 2 decimal places

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(b)

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Compute the applied overhead for Blue Spruce for the year.

Overhead Applied

$enter applied overhead in dollars

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