Problem:
McMann & Tate, an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $150,000, direct professional labor hours were estimated to be 15,000, and direct professional labor costs were projected to be $225,000.
During the year, McMann & Tate incurred actual overhead costs of $140,000, actual direct professional labor hours of 14,750 and actual direct labor costs of $222,000. Using the "Applied minus actual" formula, determine the firm's year end overhead.