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    Overhead overapplied or underapplied

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    21. Eaker Company uses activity-based costing to compute product costs for external reports. The company has three activity centers and applies overhead using predetermined overhead rates for each activity center. Estimated costs and activities for the current year are presented below for the three activity centers:
    Batc Setup
    Material handling
    General factory

    Actual costs and activities for the current year were as follows:

    Required:
    (a.) How much total overhead was applied to products during the year?
    (b.) By how much was overhead overapplied or underapplied? (Be sure to clearly label your answer as to whether the overhead was overapplied or underapplied.)

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    21. Eaker Company uses activity-based costing to compute product costs for external reports. The company has three activity centers and applies overhead using predetermined overhead rates for each activity center. Estimated costs and activities for the current year are presented below for the three activity centers:

    Actual costs and activities for the current year were as follows:

    Required:
    (a.) How much total overhead was applied to ...

    Solution Summary

    The solution explains how to calculate the applied overhead under activity based costing and determine if the overhead is underapplied or overapplied.

    $2.19

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