Answer:
A. $9.75 per direct labor hours
B.$897,000
C. Activity-based costing which is a costing system or costing method tend to have more activities than predetermined overhead.
Explanation:
A) Computation for the predetermined overhead rate
Using this formula
Pre-determined overhead rate = budgeted overhead / budgeted direct labor hours
Let plug in the formula
Pre-determined overhead rate = 975,000 / 100,000
Pre-determined overhead rate = $9.75 per direct labor hours
Therefore Pre-determined overhead rate is $9.75 per direct labor hours
B) Calculation to Determine the amount of overhead applied
Using this formula
Overhead applied = actual hours *overhead rate
Let plug in the formula
Overhead applied = 92,000 * 9.75
Overhead applied = $897,000
Therefore the Overhead applied is $897,000
C) ACTIVITY BASED costing system differ when computing a predetermined overhead in the following ways:
Activity-based costing which is a costing system or costing method tend to have more activities than predetermined overhead and such activities include:
Number of machine hours
Cost drivers such as machine set among others.
