Premier Spectacles makes frames for eyeglasses. It has two main departments: Production and Assembly. The following data pertains to its operations for the most recent year.

The manufacturing overhead budget for the most recent year was:

Manufacturing overhead is applied using budgeted rates on the basis of machine hours for Production and on the basis of direct labor cost for Assembly. Budgeted machine hours for the Production Department were 25,000; budgeted direct labor cost for Assembly was $500,000.
The following is a summary of the actual events for the year:

The ending work in process (all in Assembly) was $22,000, and the ending finished goods inventory was $95,000.

Required:
a. Compute the budgeted overhead rates.
b. Compute the machine hours actually used in the Production Department.
c. Compute the amount of factory overhead applied in the Assembly Department.
d. Compute the gross margin after disposing of under- or overapplied overhead. Premier’s policy is to write off the amount of under- or overapplied overhead direct to cost of goodssold.

Inventories, January I Direct materials (10 types)$50,000 WIP (in assembly) Finished goods 25,000 20,000 Indirect labor Supplies Utilities Repairs Supervision Factory rent Depreciation on equipment Insurance, property taxes, etc. Produetion Assembly $100,000 50,000 15,000 25,004 25,000 75,000 15,000 0,000 15,000 25,000 20,000 75,000 50,000 15,000 50,000 15,000 Production AssemyTotal Direct materials purchased Direct materials used Direct labor costs incurred $400,000 $150,000 225,000375,000 200,000 550,00 750,000 Factory overhead inrd360,000 225,000 585,000 Factory overhead applied Sales 322,000 8,250,000o 1,650,000 Cost of goods sold