Isabelle Pty Ltd Uses a Budgeted Factory Overhead Rate to Apply

question 288

Essay

Isabelle Pty Ltd uses a budgeted factory overhead rate to apply overhead to production.The following data are available for the year ended 31 December 2018.
$\begin{array}{lll}&\text {Budgeted}&\text {Actual}\\ \text { Factory overhead } & \$ 675000 & \$ 716000 \\\text { Direct labour costs } & \$ 450000 & \$ 432000 \\\text { Direct labour-hours } & 12500 \mathrm{dlh} & 13325 \mathrm{dlh}\end{array}$

Required:
a.Determine the budgeted factory overhead rate based on direct labour-hours.
b.What is the applied overhead based on direct labour-hours?
c.Is overhead overapplied or underapplied? Explain.
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Definitions:

Passive Mechanisms

Processes that occur without the input of energy, such as osmosis or diffusion, often in biological contexts.

Nucleic Acids

Biological molecules essential for life, including DNA and RNA, that carry genetic information in cells.

Carbohydrates

Organic compounds, including sugars, starches, and cellulose, which are an important source of energy for living organisms.

Proximal

Situated close to the origin or point of attachment or reference.