Question: Alternate problem E Sullivan Company applied overhead to production using a predetermined overhead rate based on machine-hours. Budgeted data for 2010 are: Budgeted machine-hours 75,000

Alternate problem E Sullivan Company applied overhead to production using a predetermined overhead rate based on machine-hours. Budgeted data for 2010 are:

Budgeted machine-hours 75,000 Budgeted manufacturing overhead $870,000

a. Compute the predetermined overhead rate.

b. Assume that in 2010, actual manufacturing overhead amounted to USD 997,500, and 86,000 machine-hours were used. Compute the amount of underapplied or overapplied manufacturing overhead for 2010.

c. Prepare the journal entry to transfer underapplied or overapplied overhead to Cost of Goods Sold.

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