The Controller Has Asked You to Examine Different Distribution Methods

Essay

The controller has asked you to examine different distribution methods for applying factory overhead to the various production orders that are processed during a year.
The following information was taken from the annual budget: Actual results for the year follow:
a.Determine the following predetermined factory overhead rates under each of the following methods:
(1)
Direct labor cost
(2)
Direct labor hours
(3)
Machine hours
b.Determine the under- or overapplied factory overhead under each of the following methods:
(1)Direct labor cost
(2)Direct labor hours
(3)Machine hours