Question: ABC Co. develops its predetermined overhead rate based on machine hours. Budgeted overhead $100,000 Budgeted machine hours 80,000 Actual machine hours 70,000 Raw material used

ABC Co. develops its predetermined overhead rate based on machine hours.

Budgeted overhead

$100,000

Budgeted machine hours

80,000

Actual machine hours

70,000

Raw material used

$ 60,000

Actual overhead

$ 88,500

a) What is the predetermined overhead rate?

b

b) What is the amount of over or under-applied overhead, if any?

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