Isabelle Pty Ltd Uses a Budgeted Factory Overhead Rate to Apply

Essay

Isabelle Pty Ltd uses a budgeted factory overhead rate to apply overhead to production.The following data are available for the year ended 31 December 2018.
$\begin{array}{lll}&\text {Budgeted}&\text {Actual}\\ \text { Factory overhead } & \$ 675000 & \$ 716000 \\\text { Direct labour costs } & \$ 450000 & \$ 432000 \\\text { Direct labour-hours } & 12500 \mathrm{dlh} & 13325 \mathrm{dlh}\end{array}$

Required:
a.Determine the budgeted factory overhead rate based on direct labour-hours.
b.What is the applied overhead based on direct labour-hours?
c.Is overhead overapplied or underapplied? Explain.
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