Markswell Corp Uses a Budgeted Factory Overhead Rate to Apply

Essay

Markswell Corp uses a budgeted factory overhead rate to apply overhead to production.The following data are available for the year ended December 31,2014.The company has budgeted factory overhead of $750,000,direct labor costs of $500,000,and direct labor hours of 15,000.The actual factory overhead incurred is $800,000,direct labor costs of 450,000,and direct labor hours of 17,000.
Required:
a.Determine the budgeted factory overhead rate based on direct labor-hours.
b.What is the applied overhead based on direct labor-hours?
c.Is overhead overapplied or underapplied? Explain.