Answer:
$3,400
Explanation:
The computation of predetermined overhead rate for the year is shown below:-
Predetermined Overhead Rate = Estimated Manufacturing Overhead ÷ Estimated Allocation Base × 100
= $119,600 ÷ $92,000 × 100
= 130%
2. The computation of the amount of underapplied or overapplied overhead for the year is shown below:-
Overhead Applied = (Opening Value of Direct Material + Purchase of Direct Material - Closing Value of Direct Material) × Predetermined Overhead Rate
= ($24,000 + $140,000 - $17,000) × 130%
= $147,000 × 130%
= $191,100
Overhead Incurred = $106,300 + $8,000 + $18,000 + $15,000 + $8,200 + $39,000
= $194,500
Underapplied overhead = $194,500 - $191,100
= $3,400
