Predetermined Overhead Rate; Various Cost Drivers
The following data pertain to the Oneida Restaurant Supply Company for the year just ended.
Budgeted sales revenue $205,000
Actual manufacturing overhead 340,000
Budgeted machine hours (based on practical capacity) 10,000
Budgeted direct-labor hours (based on practical capacity) 20,000
Budgeted direct-labor rate $ 14
Budgeted manufacturing overhead $364,000
Actual machine hours 11,000
Actual direct-labor hours 18,000
Actual direct-labor rate $ 15
Required: Compute the firm's predetermined overhead rate for the year using each of the following common cost drivers: (a) machine hours, (b) direct-labor hours, and (c) direct-labor dollars. Calculate the overapplied or underapplied overhead for the year using each of the cost drivers listed above.