Exercise 4.12 Predetermined Overhead Rate, Application of Overhead Findley Company and Lemon Company both use predetermined overhead rates to apply manu- facturing overhead to production. Findley's is based on machine hours, and Lemon's is based on materials cost. Budgeted production and cost data for Findley and Lemon are as follows: ECTIVE Findley Lemon Manufacturing overhead Units $912,000 20,000 48,000 $450,000 $990,000 60,000 Machine hours Materials cost 33,750 $1,800,000 At the end of the year, Findley Company had incurred overhead of $915,000 and had produced 19,600 units using 47.780 machine hours and materials costing $445,000. Lemon Company had incurred overhead of $972,000 and had produced 61.500 units using 32.650 machine hours and materials costing $1,777,500. Required: 1. Compute the predetermined overhead rates for Findley Company and Lemon Company. underapplied for each company, and by how much? 2. Was overhead over- or verbead Rate, Overhead Variances, Journal Entries