Question: Using the information from Exercise 4-3, suppose Morris Systems Design applied overhead to production on the basis of machine hours instead of direct labor hours.

Using the information from Exercise 4-3, suppose Morris Systems Design applied overhead to production on the basis of machine hours instead of direct labor hours.

Required:

What is the predetermined overhead rate?

What is the applied overhead for 2001?

Is overhead overapplied or underapplied and by how much?

What is the unit cost?

How can Morris Systems Design decide whether to use direct labor hours or machine hours as the basis for applying overhead? lop5

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