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Predetermined Overhead Rates
Mark Corporation estimates its manufacturing overhead to be $90,000 and its direct labor costs to be $200,000 for year 1. The actual direct labor costs were $50,000 for Job 301, $75,000 for Job 302, and $100,000 for Job 303 during year 1; the actual manufacturing overhead was $97,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates.
Required
a. How much overhead was assigned to each job during year 1?
b. What was the over- or underapplied manufacturing overhead for year 1?
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