Chan Inc. has two manufacturing departments: cutting and folding. The company has been using a plantwide predetermined rate based on direct labour cost. The following data are for the current year:

Required:
1. Calculate a plantwide predetermined overhead rate using direct labour hours.
2. Calculate applied overhead using the plantwide predetermined overhead rate.
3. Calculate the overhead variance and label the variance as underapplied or overapplied overhead.
4. Calculate separate departmental overhead rates using direct labour hours for cutting and machine hours for folding.
5. Calculate the total amount of applied overhead for each department, based on the activity- based overhead rates calculated in Requirement 4.

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Total Folding Cutting Budgeted overhead Budgeted direct labour hours Budgeted machine hours Actual overhead Actual direct labour hours Actual machine hours Prime costs $480,000 $360,000 S840,000 12,000 10,000 19,000 9,000 $440,000 $430,000 $870,000 20,000 9,000 11,000 $145,000 $155,000 $300,000