Calculate a predetermined overhead rate based on direct


Plantwide Rates

Nabors Company produces two types of stereo units: deluxe and regular. For the most recent year, Nabors reports the following data:

Budgeted overhead

$180,000


Expected activity (in direct labor hours)

50,000

Actual activity (in direct labor hours)

51,000

Actual overhead

$200,000


Deluxe

Regular

Units produced

5,000

50,000

Prime costs

$40,000

$300,000

Direct labor hours

5,000

46,000

Required

1. Calculate a predetermined overhead rate based on direct labor hours.

2. What is the applied overhead?

3. What is the under- or overapplied overhead?

4. Calculate the unit cost of each stereo unit.

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Financial Accounting: Calculate a predetermined overhead rate based on direct
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