Lewis Company calculates its predetermined rates using practical volume, which is 288,000 units. The standard cost system allows 2 direct labor hours per unit produced. Overhead is applied using direct labor hours. The total budgeted overhead is $3,168,000, of which $864,000 is fixed overhead. The actual results for the year are as follows:
Units produced: 280,000
Direct labor: 570,000 hours @ $9
Variable overhead: $2,320,000
Fixed overhead: $872,000
(1-1) The predetermined fixed overhead rate is:
(1-2) The predetermined variable overhead rate is:
(1-3) Calculate the applied fixed overhead.