1. ABC Ltd. Uses a job-order costing system with machine hours as the allocation base for overhead. The company uses normal costing to develop their overhead allocation rate. The following information is available at the beginning of the year.

	Estimate
Estimated factory overhead costs	$1,600,000
Estimated machine hours	100,000

On August 31 the following information was available:

Description	Job #1020	Job #1021
Direct materials	$12,000	$3,150
Direct labour	$8,500	$4,000
Machine hours	120	30

Use the above information to answer the following questions:

1. What is the overhead allocation rate per machine hour?

__________

2. The amount of overhead applied to Job 1020 is

$_________

3. The total cost of Job 1021, after overhead is applied is

$_________

4. Job 1020 was completed in August and the client was billed at cost plus 60%. The price of Job 1020 was $__________

6. At the end of the year actual machine hours were 94,000; therefore, total overhead applied to all jobs for the year was $__________

7. At the end of the year actual factory overhead is $1,472,000. This means that factory overhead is

1. Over-applied
2. Neither over-order under- applied
3. Under-applied

(step-by-step solution would be preferred as I am just trying to learn how to approach questions like this)