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Question 2 (10 marks) Great Eagle Company allocates overhead based on machine hours. They estimated overhead costs for the year to be $380,000. Estimated machine
Question 2 (10 marks)
Great Eagle Company allocates overhead based on machine hours. They estimated overhead costs for the year to be $380,000. Estimated machine hours was 5,000 and direct labor hours was 2,000. Estimated direct labour cost was $250,000 and direct material cost was $140,000. Actual hours and overhead costs for the year were 4,300 machine hours and $310,000 of overhead.
Required:
- Calculate the overhead application rate for the year.
- What is the amount of applied overhead for the year?
- What is the estimated total cost of production for the year?
- What is the amount of under or overapplied overhead for the year? Indicate whether it is over- or underapplie
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