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Reshiram Inc. manufactures micro-circuits in two factories; one in the Aurora Pacific Economic Zone and Freeport (APECO) and another in the Clark Freeport and Special

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Reshiram Inc. manufactures micro-circuits in two factories; one in the Aurora Pacific Economic Zone and Freeport (APECO) and another in the Clark Freeport and Special Economic Zone (CFEZ). The Vanelle factory uses direct labor cost (DLP) for its overhead rate and the Mclaren factory uses machine-hours (MHs) for its overhead rate. Information related to the manufacturing overhead (MOH) of both plants for last year is presented below: Vanelle Factory Mclaren Factory Estimated MOH costs P 2,000,000 P 3,200,000 Estimated allocation base ? 160,000 MHs Predetermined overhead rate P 100 per DLP Actual amount of allocation base ? 158,200 MHs Actual manufacturing overhead P 2,057,800 P 3,152,500 Applied manufacturing overhead P 2,020,000 Over or (under) applied overhead ? Mclaren factory's Predetermined overhead rate is P per MHS

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