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DALLAS Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead
DALLAS Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity centres Activity Centre Estimated Overhead Expected Activity Batch setups Material handling General factory Costs $20,400 1,200 52,800 2,400 78,000 2,600 Actual costs and activities for the current year were as follows: Activity Centre Batch setups Material handling General factory Actual Overhead Actual Activity Costs $20,740 1,230 52,360 2,470 77,590 2,680 Required: Prepare a table and clearly show. a) What is the predetermined OH rate? b) How much total overhead was applied to products during the year? c) By how much was overhead overapplied or underapplied
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