2.Plantwide rates: The ABC Company assigns overhead using a plantwide rate. Total overhead for the plant is estimated to be $5,100,000. The company uses direct labor hours as the cost driver and estimates that the number of hours to be worked during the upcoming year is 230,000 direct labor hours. Actual direct labor hours worked during the year was 232,000 hours.
a.Compute the plantwide rate for the upcoming year.
b.Compute the applied overhead. Assume the actual overhead for the year was $5,000,000. Determine the variance and identify whether it was over or under applied.
c.Assume the actual direct labor hours worked were 225,000. Compute the overhead applied and identify whether it was over or under applied
d.Explain how the company will dispose of the over or under applied overhead