Chapter 3

Tiger, Inc. had actual manufacturing overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period. Tiger's manufacturing overhead is a. $50,000 overapplied. b. $50,000 underapplied. c. $60,000 overapplied. d. $60,000 underapplied.

B Overhead Applied $4.00/hr× 290,000 hrs = $1,160,000 Underapplied Overhead Actual - Applied $1,210,000 - $1,160,000 = $50,000 under applied

Total direct labor cost

DL$/Hr x DLH

predetermined overhead rate (POHR)

Estimated total manufacturing overhead cost for the coming period ____________________________________________________________________________ Estimated total units in the allocation base for the coming period

Overhead applied

POHR × Actual activity (of the base)