Compute the company predetermined overhead rate

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Reference no: EM132218650

Question - Blanket Corporation applies manufacturing overhead on the basis of direct labor hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $239,700 and 4,700 estimated direct labor hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor hours were 4,600.

Required -

a. Compute the company's predetermined overhead rate for the year.

b. Determine the amount of manufacturing overhead that would have been applied to units of product for the year.

c. Determine the amount of under-applied or over-applied manufacturing overhead for the year. Don't forget to tell me if it is under-applied or over-applied.

d. Assuming that the entire amount of the under-applied or over-applied overhead is closed out to cost of goods sold, what would be the effect of the under-applied or over-applied overhead on the company's net income for the period?

Reference no: EM132218650

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