Cool Company applies manufacturing overhead on the basis of machine-hours. On December 31, the company?s manufacturing overhead control T-account included the following amounts for the whole year.

At the beginning of the year, management estimated overhead to be $4 million and the allocation base to be 250,000 machine-hours.

Required:

1. Compute the predetermined overhead rate for the year. How many machine-hours were actually consumed during the year?

2. What is the amount of actual overhead cost incurred for the year?

3. At the end of the year, did the company overapply or underapply overhead, and by how much?

Transcribed Image Text:

Manufacturing Overhead Control 3,832,546 4,192,000