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Overhead application: Working backward
The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review:
Division A
Division B
Actual machine hours
22,500
?
Estimated machine hours
20,000
Overhead application rate
$4.50
$5.00
Actual overhead
$110,000
Estimated overhead
$90,000
Applied overhead
$86,000
Over- (under-) applied overhead
$6,500
Find the unknowns for each of the divisions.
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