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Predetermined Departmental Overhead Rates, Applying Overhead to Production At the beginning of the year, Badger Company estim
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1)Calculation of predetermined overhead rate

Cutting department $       1.88 per machine hour (240,000/127,500)
Sewing department $       3.51 per direct labour hour(350,000/99,600)

2) Calculation of overhead applied to production in each department

  

Cutting department $ 26,555.00 (1.88*14,125 machine hours)
Sewing department $ 34,222.50 (3.51*9,750 direct labour hours)

3) Ascertainment of overhead been under applied or over applied

Applied Actual (under) /over applied
Cutting department $ 26,555.00 29850 $ 3295 (Under) applied
Sewing department $ 34,222.50 31100 $ 3122.4   Over applied
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