Pregunta $4$

Applied Manufacturing Overhead

For Karr Company, the predetermined overhead rate is $140\%$ of direct labor cost. During the month, Karr incurred $$90,000$ of factory labor costs, of which $$80,000$ is direct labor and $$10,000$ is indirect labor. Actual overhead incurred $($including indirect labor$)$ was $$119,000.$

Compute the amount of manufacturing overhead applied during the month. Determine the amount of under$-$or overapplied manufacturing overhead.

ACTION PLAN

Calculate the amount of overhead applied by multiplying the predetermined overhead rate by actual activity.

If applied overhead is less than actual, overhead is underapplied.

If applied overhead is greater than actual, overhead is overapplied.