For Road Patch Company, labor is the highest single expense, totaling $693,000 for 75,000 hours of work last year. Overhead costs for last year were $900,000 and were applied to specific jobs on the basis of labor hours worked. This year, the company anticipates a 25 percent increase in overhead costs. Labor costs will increase by $130,000, and the number of hours worked is expected to increase by 20 percent.

1. Determine the total amount of overhead anticipated this year. $_______

2. Compute the overhead rate for this year. Round your answer to the nearest cent. $_______ per direct labor hour

3. At the end of this year, Road Patch had compiled a total of 89,920 labor hours worked. The actual overhead incurred was $1,143,400. a. Using the overhead rate computed in 2, determine the total amount of overhead applied to operations during the year. $________

b. compute the amount of under/overapplied overhead for the year. overhead $________

c.

Will the Cost of Goods Sold account be increased or decreased to correct the under/overapplication of overhead? Since the (underapplied / overapplied) overhead amount is immaterial, the Cost of Goods Sold account will be (underapplied / overapplied) to reflect actual overhead costs.