The following data pertain to the Aquarius Hotel Supply Company for the year just ended.
Budgeted sales revenue $ 945,000
Budgeted manufacturing overhead 650,000
Budgeted machine hours (based on practical capacity) 20,000
Budgeted direct-labor hours (based on practical capacity) 25,000
Budgeted direct-labor rate per hour 13
Actual manufacturing overhead 690,000
Actual machine hours 22,000
Actual direct-labor hours 26,000
Actual direct-labor rate per hour 14
Compute the firm’s predetermined overhead rate for the year using each of the following common cost drivers: (Round your answers to 2 decimal place.)

Machine Hourper machie hour

Direct Labor hoursper direct labor hour

Direct labor dollarsper direct labor dollar

Calculate the overapplied or underapplied overhead for the year using each of the following cost drivers

Machine hours

Direct Labor hours

Direct labor dollars

Predetermined rate

$32.50 per machine hour

$26 per direct labor hour

50,000 hours per direct labor dollar

Over / under applied:

Over Applied Overheaed using machine hours = $25,000

Under Applied Overheaed using direct labor hours = -$14,000

Over Applied Overheaed using direct labor dollar = $10,000

Explanation:

Predetermined rate

Predetermined overhead rate = Budgeted Manufacturing overhead / Budgeted Machine Hours

Predetermined overhead rate = 650,000 / 20,000 = $32.5 per machine hour

Predetermined overhead rate = Budgeted Manufacturing overhead / Budgeted direct labor Hours

Predetermined overhead rate = 650,000 / 25,000 = $26 per direct labor

Predetermined overhead rate = Budgeted Manufacturing overhead / Direct labor rate

Predetermined overhead rate = 650,000 / 13 = 50,000 hours

Applied overhead:

Applied Overheaed using machine hours = 32.50 x 22,000 = $715,000

Applied Overheaed using direct labor hours = 26 x 26,000 = $676,000

Applied Overheaed using direct labor dollar  = 50,000 x 14 = $700,000

Under / Over applied Overheads:

Over Applied Overheaed using machine hours = $715,000 - 690,000 = $25,000

Under Applied Overheaed using direct labor hours = 676,000 - 690,000 = -$14,000

Over Applied Overheaed using direct labor dollar = 700,000 - 690,000 = $10,000