M$18-16.$ Developing and Using a Predetermined Overhead Rate

Assume that the following predictions were made last year for one of the plants of Milliken &

Company.

Total manufacturing overhead for the year. $.$

$$15,000,000$

Total machine hours for the year

$1,200,000$

Actual results for February were as follows.

Manufacturing overhead.

$$1,238,500$

Machine hours

$98,500$

Required

a$.$ Determine the predetermined overhead rate per machine hour.

b$.$ Using the predetermined overhead rate per machine hour, determine the manufacturing overhead

applied to Work$-$in$-$Process during February.

c$.$ As of February $1,$ actual overhead was overapplied by $$35,000.$ Determine the cumulative amount

of any overapplied or underapplied overhead at the end of February.