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    Tahoma Corporation: Application of Overhead

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    The following calendar year information about the Tahoma Corporation is available on December 31:
    [See the attached file]

    The company applies overhead on the basis of 125% of direct labor costs.

    a. Calculate the amount of over- or under-applied overhead.
    b. What is the significance of this over- or under-applied amount of overhead?

    © BrainMass Inc. brainmass.com October 10, 2019, 5:34 am ad1c9bdddf
    https://brainmass.com/business/accounting/tahoma-corporation-application-of-overhead-510119

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    The following calendar year information about the Tahoma Corporation is available on December 31:

    Advertising $28,800
    Depr, factory equip $42,320
    Depr, office equip $10,800
    Direct labor $142,600
    Factory utilities $35,650
    Interest exp $6,650
    Inventory, beg Jan 1
    DM $3,450 ...

    Solution Summary

    Your tutorial is in the Excel, attached, and shows the process for finding over and under applied.

    $2.19