Carson wondered if his uncle should consider a different allocation base, since this construction business is both labor-intensive and material-intensive. Charles agrees and determines that total DM costs incurred for the jobs worked on this year amounted to $1,228,000. At the beginning of the year, Charles's budgeted DM costs (for the projects he knew about at the time) were $851,200. Determine what the budgeted MOH rate would have been if Charles had used direct material cost as the cost driver. Further, determine applied MOH and under- or overapplied MOH for this scenario.

Answer rating: 100% (QA)

In order to calculate the budgeted manufacturing overhead MOH rate based on direct material DM cost as the cost driver we must first determine the bud... View the full answer