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?