What element of the tourism and recreation industry has increased tenfold over the last fifteen years, bringing increased revenu
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Answer: Lorein company's actual manufacturing overhead is greater than applied manufacturing overhead, so overhead has been under-applied to the extent of $100,000.
We have:
Estimated Manufacturing overhead = $650,000
Estimated Direct Labor hours = 130,000 hours
Actual Manufacturing Overhead = $650,000
Actual Direct Labor hours = 110,000 hours.
<u>Calculation of Estimated (Predetermined) Overhead rate:</u>
<u>Calculation of Applied manufacturing overhead:</u>
<u>Calculation of underapplied or overapplied manufacturing overhead:</u>
Under or over applied overhead = Actual Overhead - Applied Overhead
If actual overheads are less than applied overheads, then overheads have been over-applied.
If actual overheads are more than applied overheads, then overheads have been under-applied.
In this case,