Reference no: EM132548538

Question 1. Normal annual capacity for Sony Company is 40.000 machine hours, with fixed factory overhead budgeted as $20.000 and an estimated variable factory overhead rate of $3 per hour. During July, actual production required 3.000 machine hours, with a total factory overhead of $12.000.

Required : Compute (1) the applied factory overhead and (2) the over- or underapplied amount for July

Question 2. Normal operating capacity of Batman Inc. is 200.000 machine hours per month, the level used to compute the predetermined factory overhead application rate. At this level of activity, fixed factory overhead is estimated to be $100.000, and variable factory overhead is estimated to be $300.000. During February, actual production required 120.000 machine hours and actual factory overhead totaled $300.000.

Required :

1. Determined the fixed portion of the factory overhead application rate

2. Determined the variable portion of the factory overhead application rate

3. Is factory overhead for February over- or underapplied, and by how much ?

Question 3. The Rock Ltd made the following data available from its accounting records and reports :

a. $600,000 predetermined overhead rate/150,000 machine hours = $4 predetermined factory overhead rate

b. During the year, the company used 120.000 machine hours. Actual factory overhead was $400.000

Required : Compute the over- or underapplied factory overhead amount for the year.