Valtec Company has three manufacturing divisions: A, B, and C. Each division has its own job order costing system and forecasts the following manufacturing costs for the year 2000 :

The predetermined overhead rates for each division are based on the following:
A: Machine hours B: Materials to be used C: Direct labor hours 1. Compute the predetermined overhead rate to be used in 2000 by each division.
2. If Division A actually had 37,000 machine hours and $\$ 49,000$ of manufacturing overhead, will overhead be over- or underapplied and by how much?
3. If Division B used 95,000 pounds of materials in 2000 , what will be the applied manufacturing overhead?
4. Interpretive Question: Of the two commonly used methods to dispose of overor underapplied manufacturing overhead, which method would you recommend and why?

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Division A B C Materials to be used (lbs.) 120,000 100,000 80.000 Direct labor hours 45,000 60,000 25,000 Machine hours... 40,000 25.000 15,000 Total budgeted manufacturing overhead $50,000 $70,000 $45,000