(Appendix 4B)The Management of Roger Corporation Would Like to Investigate

(Appendix 4B)The management of Roger Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year.The company's controller has provided an example to illustrate how this new system would work.In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 49, 000 machine-hours.In addition, capacity is 60, 000 machine-hours and the actual activity for the year is 47, 900 machine-hours.All of the manufacturing overhead is fixed and is $1, 587, 600 per year.For simplicity, it is assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity and the actual amount of manufacturing overhead for the year.Job T43G, which required 130 machine-hours, is one of the jobs worked on during the year.
Required:
a.Determine the predetermined overhead rate if the predetermined overhead rate is based on the amount of the allocation base at capacity.
b.Determine how much overhead would be applied to Job T43G if the predetermined overhead rate is based on the amount of the allocation base at capacity.
c.Determine the underapplied or overapplied overhead for the year if the predetermined overhead rate is based on the amount of the allocation base at capacity.