Exercise 9A-3 (Algo) Applying Overhead in a Standard Costing System [LO9-7]

Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Budgeted variable overhead cost per direct labor-hour	$ 3.50
Total budgeted fixed overhead cost per year	$ 565,908
Budgeted direct labor-hours (denominator level of activity)	75,455
Actual direct labor-hours	85,000
Standard direct labor-hours allowed for the actual output	80,000

Required:

1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fixed overhead and the total budgeted variable overhead in the numerator of your rate. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

2. Compute the amount of overhead that would be applied to the output of the period. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)