Maxiset Constructions Applies Overhead to Jobs Using Machine Hours At the End of the Year,it Was Determined That Overhead

question 18

Essay

Maxiset Constructions applies overhead to jobs using machine hours.The following data are available for the year: $\begin{array}{lr}\text { Estimated machine hours } & 200000 \\\text { Actual machine hours } & 150000 \\\text { Actual overhead } & \$ 750000\end{array}$
At the end of the year,it was determined that overhead was underapplied by $150 000.
Required:
A. What was the total applied overhead for the year?
B. What was the predetermined overhead rate?

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Definitions:

Purchasing Department

A specialized division within a company responsible for acquiring goods and services that the company needs to operate.

Overhead Variance

The difference between the actual overhead costs incurred and the overhead costs applied to products or services.

Actual Overhead

Represents the real costs associated with manufacturing overhead, including expenses such as rent, utilities, and equipment maintenance incurred during production.

Overhead Costs

The indirect costs associated with running a business that cannot be linked to a specific product or service.