Question: Warner Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year. Overhead is applied on the basis of

Warner Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year.

Overhead is applied on the basis of direct labor hours.
(a) Compute the predetermined overhead rate.
(b) Determine the amount of overhead applied for the year.
(c) Explain how an activity-based costing system might differ in terms of computing a predetermined overheadrate.

Budgeted Actual Overhead cost Machine hours Direct labor hours $1,000,000 $950000 45,000 92,000 50,000 100,000

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