Reference no: EM133055622
Question - The following data is provided for the ABC company:
Budgeted overhead for the year is $300,000
Projected direct labor cost for the year - $100,000
Estimated machine hours for the year -20,000
Estimated direct labor hours for the year - 20,000
Overhead is applied to product based on direct labor costs
During the month of June the company incurred 3000 labor hours, used 2500 machine hours and incurred $30,000 of labor costs and $75,000 of overhead costs.
A. Calculate the overhead rate.
B. Calculate the amount of overhead applied in June.
C. Calculate the over or underapplied overhead for June and explain what it means.