Select Page

Tules Company is planning to produce 2,400,000 power drills for the coming year. The company uses direct labour hours to assign overhead to products. Each drill requires 0.5 standard hour of labour for completion. The total budgeted overhead was $2,700,000. The total fixed overhead budgeted for the coming year is $1,320,000. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. Actual results for the year are:Actual production (units) 2,360,000Actual direct labour hours 1,190,000Actual variable overhead 000Actual variable overhead $1,410,000Actual fixed overhead 000Actual fixed overhead $1,260,000Required:1. Compute the applied fixed overhead.