At the beginning of the year, Potter Company estimated the following: Overhead……………………..$864,000…
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At the beginning of the year, Potter Company estimated the following:
Overhead……………………..$864,000
Direct labour hours…………….320,000
Potter uses normal costing and applies overhead on the basis of direct labour hours. For the month of January, direct labour hours were 7,950. By the end of the year, Potter showed the following actual amounts:
Overhead……………………..$904,000
Direct labour hours…………….330,400
Assume that unadjusted Cost of Goods Sold for Potter was $942,680.
Required:
1. Calculate the predetermined overhead rate for Potter.
2. Calculate the overhead applied to production in January.
3. Calculate the total applied overhead for the year. Was overhead over- or underapplied? By how much?
At the beginning of the year Potter Company estimated the
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