Reference no: EM132633738

Alberton Electronics makes inexpensive GPS navigation devices and uses a normal costing system that applies overhead based on machine hours. The following 2016 budgeted data are available:

Variable FOH at 100,000 machine hours $1,250,000

Variable FOH at 150,000 machine hours 1,875,000

Fixed FOH at all levels between 10,000

and 180,000 machine hours 1,440,000

Practical capacity is 180,000 hours; expected capacity is two-thirds of practical.

Required:

Question 1: What is Alberton's predetermined variable OH rate?

Question 2: What is the predetermined fixed OH rate using practical capacity?

Question 3: What is the predetermined fixed OH rate using expected capacity?

During 2016, the firm records 110,000 machine hours and $2,710,000 of overhead costs.

Question 4: o How much variable overhead is applied?

Question 5: o How much fixed overhead is applied using the rates found in parts (b) and (c)?

Question 6: Compute for the under- or overapplied overhead for 2016 using both fixed OH rates.