intain Peaks applies overhead on the basis of machine hours and reports the following information: Actual Overhead Machine hours Direct materials Direct labor Feedback Budget $150,000 30,000 Check Mock $144,000 27,000 A. What is the predetermined overhead rate? 5✔ per machine hour B. How much overhead was applied during the year? 135,000 ✓ machine hours C. Was overhead over- or underapplied, and by what amount? Underapplied ✓$ 9,000 ✓ $210,000 $350,000

Use three different activities as cost drivers, machine setups, machine hours, and inspections to compute the overhead rate for each activity. Activity Overhead per Activity Annual Usage Machine Setups $75,000 6,000 Machine Hours $85,002 5,484 Inspections 70,000 20,000

Answer question D

Applying Factory Overhead Salinger Company estimates that total factory overhead costs will be $90,000 for the year. Direct labor hours are estimated to be 15,000. a. For Salinger Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. If required, round your answer to two decimal places. $4 per direct labor hour b. During May, Salinger Company accumulated 660 hours of direct labor costs on Job 200 and 620 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. $4 c. Prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate. If an amount box does not require an entry, leave it blank. 88

Mountain Peaks applies overhead on the basis of machine hours and reports the following information: Budget Actual Overhead $420,000 $418,000 Machine hours 70,000 68,000 Direct materials $210,000 Direct labor $350,000 A. What is the predetermined overhead rate? per machine hour B. How much overhead was applied during the year? machine hours C. Was overhead over- or underapplied, and by what amount? D. What is the journal entry to dispose of the over- or underapplied overhead? If an amount box does not require an entry, leave it blank. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Manufacturing Overhead

J5

Using the attached, Was the overhead underallocated or overallocated? By how much?