EXERCISE 3-10 Predetermined Overhead Rate; Applying Overhead; Underapplied or Overapplied Overhead [LO3, L05, L08] Estimated cost and operating data for three companies for the upcoming year follow: Direct labor-hours. Machine-hours Direct materials cost Manufacturing overhead cost Company X Company Y Company Z 80,000 45,000 60,000 30,000 70,000 21,000 $400,000 $290,000 $300,000 $536,000 $315,000 $480,000 Predetermined overhead rates are computed using the following allocation bases in the three companies: Allocation Base Company X Direct labor-hours Company Y. Machine-hours Company Z Direct materials cost Required: 1. 2. Compute each company's predetermined overhead rate. Assume that Company X works on three jobs during the upcoming year. Direct labor-hours recorded by job are: Job 418, 12,000 hours; Job 419, 36,000 hours; and Job 420, 30,000 hours. How much overhead will the company apply to Work in Process for the year? If actual over- head costs total $530,000 for the year, will overhead be underapplied or overapplied? By how much?