Question

# Logan Products computes its predetermined overhead rate annually on the basis of machine-hours. At the beginning...

Logan Products computes its predetermined overhead rate annually on the basis of machine-hours. At the beginning of the year, it estimated that its total manufacturing overhead would be \$356,500 and machines would be run a total of 24,000 hours. Its actual total manufacturing overhead for the year was \$344,400 and its actual total machine-hours was 23,500 hours.

Required:

Compute the company’s predetermined overhead rate for the year, calculate the total overhead applied, and determine the amount of under- or overapplied overhead in the year. (Round your predetermined overhead rate to 2 decimal places.)

 Answer Total manufacturing overhead \$    356,500 Divide by Estimated Machine hours 24000 Predetermined overhead rate 14.85 per machine-hour Actual machine-hours 23500 X Predetermined overhead rate 14.85 Total overhead applied \$    348,975 Total overhead applied \$    348,975 Less: Actual manufacturing overhead \$    344,400 Overapplied overhead \$        4,575

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