The potato department of a major food manufacturer has an overhead rate of $4.65 per direct-labor hour, based on expected variable overhead of $165,000 per year, expected fixed overhead of $346,500 per year, and expected direct-labor hours of 110,000 per year. Data for the year's operations follow: (Click on the icon to view the data.) Read the requirements. Manufacturing-overhead budget Direct-Labor Hours Used Overhead Costs Incurred* First 6 months Requirement 1. What is the underapplied or overapplied overhead for each 6-month period? Label your answer as underapplied or overapplied. Begin by selecting the formula labels, and then compute the difference for the first 6 months and the last 6 months. Last 6 months 56,000 47,000 267,250 244,750 *Fixed costs incurred were exactly equal to budgeted amounts throughout the year. Applied overhead costs Actual overhead costs Difference First 6 months $ 260,400 Last 6 months $ 218,550 267,250 244,750 Requirement 2. Explain briefly the probable causes for the underapplied or overapplied overhead. Focus on variable and fixed costs separately. In the first period, direct-labor hours used exceeded $ 6,850 Underapplied Print Done $ 26,200 Underapplied half of the year's total budget by 1000 hours. This makes fixed overhead overapplied by $ 3150. In the first period, actual variable overhead was $ overhead is Variable overhead applied is $ so it is by $ by $ Therefore, the total Help me solve this Etext pages Get more help - Clear all Check answer