Reference no: EM132514365

Rivera Company applies manufacturing overhead to jobs on the basis of direct labor cost. Overhead costs are expected (budgeted) to total $240,000 for the year, and direct labor cost is estimated at $240,000. For the year, $185,000 of overhead costs are incurred and the actual direct labor cost was $210,000.

Instructions

Question (a) Compute the predetermined manufacturing overhead rate that was calculated at the beginning of the year.

Question (b) Compute the total amount of overhead that was applied during the year (using the predetermined rate that you calculated in a above), keeping in mind that the actual direct labor cost was $210,000.

Question (c) Compare the amount of overhead that was applied during the year with the actual incurred overhead costs. What is the amount of under - or overapplied overhead at December 31? (please identify both the amount and that it was "under-applied" or "over-applied")