Langston Automotive Accessories applies overhead using a combined rate for fixed and variable overhead. The rate is 250 percent of direct labor cost. During the first three months of the current year, actual costs incurred were as followed: Direct Labor Cost January $180,000 February 165,000 March 170,000 Actual Overhead January $440,000 February 420,000 March 421,000
a. What amount of overhead was applied to production in each of the three months?
b. What was the underapplied or overapplied overhead for each of the three months and for the first quarter?