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Find why do need to use factory overhead application rate

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Reference no: EM132560843

We have the following estimated and actual data for the year 2020.

                                                            Estimated                           Actual (Occured)

Factory supervision                                       S 50,000                          S 51,000

Indirect labor                                                     115,000                        99,000

Inspection                                                            70,000                      73,000

Maintenance                                                          35,000                      39,000

Indirect material                                                       25,000                    20,000

Heat, Light, power                                                     20,000                     18,000

Depreciation                                                                35,000                   35,000

Miscellaneous factory overhead                                          10,000                 3,000

Total Factory Overhead                                                   S 360.000 TL        S 338,000

Total Direct Labor Hours                                                144,000 DIS             121,500 DIS

Required:

Question 1: Compute factory overhead application rate.

Question 2: Determine the over- or under applied overhead for the year.

Question 3: Why do we need to use factory overhead application rate ?

Reference no: EM132560843

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