Answer:
Results are below.
Explanation:
<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total number of surgical room hours= (8*7)*52= 2,912 hours
Predetermined manufacturing overhead rate= 756,000 / 2,912
Predetermined manufacturing overhead rate= $259.61 per surgical room hour
<u>Now, we can allocate costs using the following formula:</u>
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Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 259.61*5
Allocated MOH= $1,298.05
<u>Finally, the under/over allocation for January:</u>
Under/over applied overhead= real overhead - allocated overhead
Allocated overhead= 259.61*240= $62,306.4
Under/over applied overhead= 67,250 - 62,306.4
Underapplied overhead= $4,943.6