Fixed and Variable Factory Overhead Rates; Over- or Underapplied Amount. Normal operating capacity of Baco Inc. is 100,000 machine hours per month, the level used to compute the predetermined factory over¬ head application rate. At this level of activity, fixed factory overhead is estimated to be $150,000, and vari¬ able factory overhead is estimated to be $250,000. During March, actual production required 105,000 machine hours and actual factory overhead totaled $415,000. LO6 Required:

(1) Determine the fixed portion of the factory overhead application rate.

(2) Determine the variable poition of the factoiy overhead application rate.

(3) Is factory overhead for March over- or underapplied, and by how much?