Reference no: EM131623855

Question: Cost and production data for a manufacturing company for a year were as follows:

Budgeted variable factory overhead $120,000

Budgeted fixed factory overhead $180,000 $300,00

Budgeted production (direct labour hours) 15,000

Actual variable factory overhead $125,300

Actual fixed factory overhead $164,700 $290,000

Actual production (direct labour hours) 15,500

Factory overhead is applied to production using direct labour hours as the cost driver.

Required:

(a) Calculate the factory overhead application rate, and,

(b) Under or over applied overhead.