Answer:
Predetermined overhead rate = $9
January = $12,000 over applied
December - $2,000 under applied
Explanation:
For computing the ended overhead amount, first, we have to compute the predetermined overhead rate. The formula is shown below:
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated machine labor-hours)
= $1,800,000 ÷ 200,000 hours
= $9
Now we have to find the actual overhead for the January month which equal to
= Actual machine labor-hours × predetermined overhead rate
= 22,00 hours × $9
= $198,000
So, the ending overhead equals to
= Actual manufacturing overhead - actual overhead
= $186,000 - $198,000
= $12,000 over applied
And, the actual manufacturing overhead for the December month which equal to
= $186,000 + $1,940,000
= $2,126,000
Actual overhead = (22,000 + 214,000) × 9 = $2,124,000
So, the ending overhead equals to
= Actual manufacturing overhead - actual overhead
= $2,126,000 - $2,124,000
= $2,000 under applied
