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    Under/over applied overhead

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    SamMart., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $5,000,000 and total direct labor hours to be 200,000 hours. Calculate SamMart's predetermined overhead rate. In March, SamMart incurred actual overhead costs of $415,000 and used 18,000 direct labor hours. How much was SamMart's over- or under-applied overhead for the month of March?

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    Predetermined overhead rate = Estimated overhead/Estimated direct labor ...

    Solution Summary

    The solution explains how to calculate the amount of under or over applied overhead.