Calculate the predetermined overhead rate

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Problem - Aaron, I like your analysis! At the beginning of 2010, Zuir Company's accounting department calculated the following estimates for the coming year's production:

Estimated overhead $441,600

Direct labor hours 9,200 hr

During the year, Zuir Company experienced $440,000 in actual overhead costs and actually worked 9,100 direct labor hours. Zuir applies overhead to production using a predetermined overhead rate based on direct labor hours.

a. Calculate the predetermined overhead rate Zuir uses to apply overhead. (Show your computations.)

b. By what amount was overhead over- or underapplied for 2010? (Show your computations.)

c. Assuming the amount of over- or underapplied overhead is not significant, will the Cost of Goods Sold account be increased or decreased to correct the application of overhead?

Reference no: EM131571828

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