Chapter 4, Problem 4.10Q

To determine

Concept introduction:

Predetermined overhead allocation:

Overhead costs are indirect manufacturing costs that are indirectly related to each unit or the product. Such costs are allocated to the product using a predetermined overhead allocation rate.

  $\text{Predetermined overhead allocation rate = }\frac{\text{Estimated Manufacturing overhead Cost}}{\text{Allocation base}}$

To indicate: the meaning of underapplied overhead and over applied overhead.