Problem

Calculating Overhead Rates, Actual and Applied Manufacturing Overhead, and Analyzing Over–...

Calculating Overhead Rates, Actual and Applied Manufacturing Overhead, and Analyzing Over–or Underapplied Manufacturing Overhead

Cayman Custom Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $300,000 and machine hours to be 15,000. Actual manufacturing overhead and machine hours were $340,000 and 16,000, respectively.

Required:

1.Compute the predetermined overhead rate.


2. Compute applied manufacturing overhead.


3. Compute over–or underapplied manufacturing overhead.

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