Palmer Co$.$ has two departments that all goods pass through: machining and assembly.

Machining overhead is applied based on machine hours, and assembly overhead is applied based

on direct labour hours.

Data on each department are as follows:

Machining Assembly

Budgeted Overhead $$75,000$ $$40,000$

Budgeted Direct Labour Hours $5,00010,000$

Budgeted Machine Hours $25,0001,000$

Actual Overhead $$75,400$ $$39,200$

Actual Direct Labour Hours $5,2039,980$

Actual Machine Hours $25,040850$

Required:

$1.$ If the company applied overhead using a plantwide rate based on direct labour hours,

calculated the plantwide overhead rate.

$2.$ Calculate the overhead rate for each department.

$3.$ What is each department's applied overhead?

$4.$ Calculate each department's overhead variance. Specify whether it is overapplied or

underapplied.