A company allocates overhead at a rate of 155% of direct labor cost. Actual overhead cost for the current period is $1,050,000, and direct labor cost is $590,000.
A company allocates overhead at a rate of 155% of direct labor cost. Actual overhead cost for the current period is $1,050,000, and direct labor cost is $590,000.
Chapter1: Financial Statements And Business Decisions
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A company allocates overhead at a rate of 155% of direct labor cost. Actual overhead cost for the current period is $1,050,000, and
direct labor cost is $590,000.
Determine whether there is over- or underapplied overhead using the T-account below.
Actual overhead
Factory Overhead
1,050,000
914,500 Overhead applied
135,500
Underapplied
overhead
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