Findley Company and Lemon Company both use predetermined overhead rates to apply manufacturing overhead to production. Findley€™s is based on machine hours, and Lemon€™s is based on materials cost. Budgeted production and cost data for Findley and Lemon are as follows:

At the end of the year, Findley Company had incurred overhead of $915,000 and had produced 19,600 units using 47,780 machine hours and materials costing $445,000. Lemon Company had incurred overhead of $972,000 and had produced 61,500 units using 32,650 machine hours and materials costing $1,777,500.
Required:
1. Compute the predetermined overhead rates for Findley Company and Lemon Company.
2. Was overhead over- or under-applied for each company, and by how much?

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Findley Lemon Manufacturing overhead Units Machine hours Materials cost S912,000 20,000 48,000 S450,000 $990,000 60,000 33,750 S1,800,000