Current Attempt in Progress Marigold Manufacturing Company, a small manufacturer of appliance parts, has just completed its first year of operations. The company's controller, George Robinson, has been reviewing the results for the year and is concerned about the application of factory overhead. Trainor is using the following information to assess operations. Marigold uses several machines with a combined cost of $2,290,000 and no residual value. Each machine has an output of 5 units of product per hour and a useful life of 26,000 machine hours. Selected actual data on Marigold's operations for the year just ended are as follows: Products manufactured Machine use Direct labor Laborrate Total factory overhead Cost of Goods Sold Finished Goods inventory year-end) Work in Process inventory year-end 664,000 units 194.000 hours 25.000 hours $ 15 per hour $ 1.180.000 $ 1.735 060 $ 433.240 $ 0 Total factory overhead is applied based on direct labor cost using a predetermined plantwide rate Budgeted activity for the year included 10 employees each working 1.800 productive hours per year to produce 675,000 units of product. Because the machines are highly automated, each employee can operate two to four machines simultaneously. Normal activity is for each employee to operate three machines Machine Overhead was budgeted at 5810,000 Your answer is correct George Robinson believes that Marigold Manufacturing Company should apply manufacturing overhead based on machine hours . Calculate the predetermined overhead rate using that activity base. ( Round OH rate to 2 decimal places, es 5275) Predetermined overhead rate $ 6/machine hour e Textbook and Media Attempts: 1 of 3 used (d) If Marigold Manufacturing Company had used machine hours as its application base, would manufacturing overhead have been underapplied or overapplied? By how much (Round answer to decimal places, s. 5.275) Overhead bys