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The Controller has asked you to examine different distribution methods for applying factory overhead to the various production orders that are processed during a year.

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The Controller has asked you to examine different distribution methods for applying factory overhead to the various production orders that are processed during a year. The following information was taken from the annual budget: Direct labor hours $4.000 Machine hours 120,000 Manufacturing costs: Di rect labor $525,000 Direct materials 180,000 Indirect labor 75.000 Electric power 48,000 Paynoll taxes 12, 600 Machine maintenance and repair 9, 200 Factory supplies 16,000 Factory heat and light 14,000 Depreciation, taxes, and insurance: Factory buildings 135,000 Machinery $20, 200 Machinery $1, 335,000 Actual results for the year follow: Direct labor hours $6,000 Machine hours 110,000 Manufacturing costs: Direct labor $540,000 Direct material 200,000 Factory overhead 625,000 $1, 365,000 Determine the following predetermined factory overhead rates under each of the following methods: (1) Direct labor cost (2) Direct labor hours (3) Machine hours Determine the under or over applied factory overhead under each of the following methods: (1) Direct labor cost (2) Direct labor hours (3) Machine hours

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