Erca, Inc.produces automobile bumpers.Overhead is applied on the basis of machine hours required for cutting and fabricating.A predetermined overhead application rate of $15.00 per machine hour was established for 2019.
(a.)If 9,000 machine hours were expected to be used during 2019, how much overhead was expected to be incurred?
(b.)Actual overhead incurred during 2019 totaled $135,000, and 9,200 machine hours were used during 2019.Calculate the amount of over- or underapplied overhead for 2019.
(c.)Explain the accounting necessary for the over- or underapplied overhead for the year.

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The Answer of Erca, Inc.produces automobile bumpers.Overhead is applied on the basis of machine hours required for cutting and fabricating.A predetermined overhead application rate of $15.00 per machine hour was established for 2019.
(a.)If 9,000 machine hours were expected to be used during 2019, how much overhead was expected to be incurred?
(b.)Actual overhead incurred during 2019 totaled $135,000, and 9,200 machine hours were used during 2019.Calculate the amount of over- or underapplied overhead for 2019.
(c.)Explain the accounting necessary for the over- or underapplied overhead for the year.

Erca, IncProduces Automobile Bumpers