Question:
(Predetermined OH rate) Langston Automotive Accessories applies overhead using a combined rate for fixed and variable overhead. The rate is 250 percent of direct labor cost. During the first three months of the current year, actual costs incurred were as follows:
|
Direct Labor Cost
|
Actual Overhead
|
|
January
|
$180,000
|
$440,000
|
|
February
|
165,000
|
420,400
|
|
March
|
170,000
|
421,000
|
a. What amount of overhead was applied to production in each of the three months?
b. What was the underapplied or overapplied overhead for each of the three months and for the first quarter?