Question - Predetermined OH rate
Langston Automotive Accessories applies overhead using a combined rate for fixed and variable overhead. Th e rate is 250 percent of direct labor cost. During the fi rst 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?