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The Co rchran Company forecasts that total overhead for the current year will be $12,000,000 and that total machine hours will be 100,000 hours. Year
The Corchran Company forecasts that total overhead for the current year will be $12,000,000 and that total machine hours will be 100,000 hours. Year to date, the actual overhead is $8,000,000 and the actual machine hours are 200,000 hours. If the Cochran Company uses a predetermined overhead rate based on machine hours for applying overhead, what is that overhead rate? Show the OH T-account at this point in the year. Is OH underapplied or overapplied?
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