Firms predetermined rate for direct labor hours

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
Budgedted machine hours……….10,000
Budgeted direct-labor hours……20,000
Budgeted direct-labor rate……….$14
Budgeted manufacturing overhead.364,000
Actual machin hours…………..11,000
Actual direct-labor hours……..18,000
Actual direct-labor rate…………$15
Question 1) What is the predetermined overhead rate for the year using machine hours?
Question 2) What is the firm’s predetermined rate for direct labor hours?
Question 3) What is the overapplied or underapplied overhead for the year for the firm using
a)machine hours, b) direct-labor hours, and c) direct-labor dollars?
Firms predetermined rate for direct labor hours
Accounting Basics
Answer 1
Predetermined overhead rate using machine hours = Budgeted manufacturing overheads/Budgeted machine h
Predetermined overhead rate using machine hours = $ 364,000/10,000 = $ 36.40 per hour

Answer 2
Predetermined overhead rate using labor hours = Budgeted manufacturing overheads/Budgeted labor hours
Predetermined overhead rate using labor hours = $ 364,000/20,000 = $ 18.20 per hour

Predetermined overhead rate using direct labor dollars = Budgeted manufacturing overheads/Budgeted labor

Predetermined overhead rate using direct labor dollars = $ 364,000/(20,000 hours * $ 14 per hour) = 130 % of d

Answer 3
(a) Under/Over applied overheads using machine hours
Actual overheads $ 340,000
Applied overheads $ 400,400 (11,000 machine hours *$ 36.40 per machine hour)
Overapplied overheads $ 60,400

(b) Under/Over applied overheads using direct labor hours

Actual overheads $ 340,000
Applied overheads $ 327,600 (18,000 machine hours *$ 18.20 per machine hour)
Underapplied overheads $ -12,400

(c) Under/Over applied overheads using direct labor dollars

Actual overheads $ 340,000
Applied overheads $ 351,000 (130% of (18,000 hours * $ 15 per hour)
Overapplied overheads $ 11,000
ds/Budgeted machine hours

Budgeted labor hours

rheads/Budgeted labor costs

4 per hour) = 130 % of direct labor cost

18000*18.2