The Dewey Company uses a predetermined overhead rate to apply manufacturing overhead to production. The rate is based on direct labour hours. Estimates for the year just ended are as follows:
During the year Dewey Company used 37,000 direct labour hours.
At the end of the year, Dewey Company records revealed the following information:
Required:

a.
Calculate the predetermined overhead rate for the year.
b.
Determine the amount of overhead applied during the year.
c.
Determine the amount of underapplied or overapplied manufacturing overhead for the year.

Question

The Dewey Company uses a predetermined overhead rate to apply manufacturing overhead to production. The rate is based on direct labour hours. Estimates for the year just ended are as follows:
During the year Dewey Company used 37,000 direct labour hours.
At the end of the year, Dewey Company records revealed the following information:
  Required:
  
a.
Calculate the predetermined overhead rate for the year.
b.
Determine the amount of overhead applied during the year.
c.
Determine the amount of underapplied or overapplied manufacturing overhead for the year.

Quizplus · Accepted Answer

The Answer of The Dewey Company uses a predetermined overhead rate to apply manufacturing overhead to production. The rate is based on direct labour hours. Estimates for the year just ended are as follows:
During the year Dewey Company used 37,000 direct labour hours.
At the end of the year, Dewey Company records revealed the following information:
  Required:
  
a.
Calculate the predetermined overhead rate for the year.
b.
Determine the amount of overhead applied during the year.
c.
Determine the amount of underapplied or overapplied manufacturing overhead for the year.

The Dewey Company Uses a Predetermined Overhead Rate to Apply