Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of...

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Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, t

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Answer 1

Answer #1

Predetermined overhead rate=Estimated overhead/Estimated machine hours

=(325,000/25000)=$13 per machine hour

Hence applied overhead=($13*26000)

=$338,000

Hence since applied overhead is less than actual overhead;

Underapplied overhead=(372,000-338,000)=$34,000

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Answer 2

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