Reference no: EM132060070

Question - Determining Under & Over applied overhead

Roller Industries uses a job-order costing system and applies overhead on the basis of direct labour hours. At the beginning of 2014, management estimated that 200,000 direct labour hours would be worked and $600,000 of overhead costs would be incurred. During the year, the company actually worked 220,000 direct labour hours and incurred the following manufacturing costs: Indirect labour $140,000 Indirect materials 100,000Insurance 50,000 Utilities 90,000 Repairs & maintenance 80,000 Depreciation 180,000 Direct materials used in production 540,000 Direct labour 700,000

Required:

a) Calculate the budgeted factory overhead application rate for 2014.

b) Determine the amount of manufacturing overhead applied to work in process during2014.

c) Determine the amount of underapplied or overapplied overhead for the year.