Accounting Assignment | Custom Assignment Help

Ravsten Company uses a job-order costing system.

The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 38,000 machine-hours and incur $165,300 in manufacturing overhead cost. The following transactions occurred during the year:

a. Raw materials requisitioned for use in production, $192,000 (75% direct and 25% indirect).

b. The following costs were incurred for employee services:

Direct labor$162,000 Indirect labor$20,000 Sales commissions$12,000 Administrative salaries$27,000

c. Heat, power, and water costs incurred in the factory, $44,000.

d. Insurance costs, $12,000 (85% relates to factory operations, and 15% relates to selling and administrative activities).

e. Advertising costs incurred, $52,000.

f. Depreciation recorded for the year, $62,000 (80% relates to factory operations, and 20% relates to selling and administrative activities).

g. The company used 42,000 machine-hours during the year.

h. Goods that cost $482,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.

i. Sales for the year totaled $704,000. The total cost to manufacture these goods according to their job cost sheets was $477,000

Required:

1. Determine the underapplied or overapplied overhead for the year. (Round predetermined overhead rate to 2 decimal places.)