Erca inc produces automobile bumpers overhead is applied on

Reference no: EM13597643

Erca, Inc. produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $15.00 per machine hour was established for 2009.

(a.) If 9,000 machine hours were expected to be used during 2009, how much overhead was expected to be incurred?

(b.) Actual overhead incurred during 2009 totaled $135,000, and 9,200 machine hours were used during 2009. Calculate the amount of over-or underapplied overhead for 2009.

(c.) Explain the accounting necessary for the over- or underapplied overhead for the year.

Reference no: EM13597643

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