Tom's Tool & Die uses a predetermined factory overhead rate based on machine-hours For August, Tom's...

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Toms Tool & Die uses a predetermined factory overhead rate based on machine-hours For August, Toms budgeted overhead was $7

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Answer 1

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Answer #1

Budgeted overhead cost = $714,000

Budgeted machine hour = 68,000

Overhead rate = Budgeted overhead cost/Budgeted machine hour

= 714,000/68,000

= $10.5 per machine hour

Actual machine hour = 69,500

Applied overhead = Actual machine hour x Overhead rate

= 69,500 x 10.5

= $729,750

Actual overhead = $773,500

Under applied overhead = Actual overhead - Applied overhead

= 773,500 - 729,750

= $43,750

Under applied manufacturing overhead in August = $43,750

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