Reference no: EM132633734

The following information about Chachi Company's budgeted overhead are as follows:

Variable overhead @ 2,000 direct labor hours $150,000

Fixed overhead @ 2,000 direct labor hours $100,000

Chachi uses normal costing in accounting for the factory overhead with a predetermined rate based on direct labor hours. They use the flexible budgets in order to calculate the predetermined rate. Actual labor hours worked during the current period is 1,700 hours.

The following information pertains to the costs actually incurred by Chachi during the current period:

Depreciation expense, machine            $40,000

Depreciation expense, factory          $10,000

Direct materials                          $100,000

Indirect labor                               $60,000

Indirect materials                            $20,000

Marketing manager's salary,

net of 15% part-time salary in

factory supervision                           $85,000

Utilities expense, 70% of which

is related to factory                       $50,000

Office supplies                               $15,000

Miscellaneous factory expense          $35,000

Administrative salaries, 5% are

related to part-timers in

quality inspection                           $120,000

Required:

Question 1: How much is the applied overhead?

Question 2: How much is the actual overhead incurred?

Question 3: How much is the under- or overrapplied overhead during the current period?