Computing the Predetermined Overhead Rate [LO3 - CC5] Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labour-hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $540,000 and the total direct labour would be 30,000 hours. Its actual total manufacturing overhead for the year was $547,900, and its actual total direct labour was 31,000 hours. Required: Compute the company's predetermined overhead rate for the year. BRIEF EXERCISE 3-3 Computing the Predetermined Overhead Rate [LO3 - CC5] Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labour-hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $540,000 and the total direct labour would be 30,000 hours. Its actual total manufacturing overhead for the year was $547,900, and its actual total direct labour was 31,000 hours. Required: Compute the company's predetermined overhead rate for the year. EXERCISE 3-7 Applying Overhead With Differing Bases [LO3 - CC5; LO7 - CC14] Estimated cost and operating data for three companies for the upcoming year follow: Company X Y Z Direct labour-hours 80,000 45,000 60,000 Machine-hours 30,000 125,000 21,000 Direct materials cost $400,000 $290,000 $300,000 Manufacturing overhead cost $536,000 $520,000 $480,000 Page 130 Predetermined overhead rates are computed using the following bases in the three companies: Company Overhead Rate Based On X Direct labour-hours Y Machine-hours Z Direct materials cost Required: 1. Compute the predetermined overhead rate to be used in each company during the upcoming year. 2. Assume that Company X works on three jobs during the upcoming year. Direct labour-hours recorded by job are as follows: job 418, 18,000 hours; job 419, 26,000 hours; job 420, 38,000 hours. How much overhead cost will the company apply to work in process for the year? If actual overhead costs total $530,000 for the year, will overhead be under- or overapplied? By how much?