what is the total predetermined oh rate per direct labor hour 641259

(Predetermined OH rates and underapplied/overapplied OH) Davidson’s Dolls had the following information in its Work in Process Inventory account for June 2010:

Work in Process Inventory

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Beginning balance

10,000

Transferred out

335,000

Materials added

150,000

Labor (5,000 DLHs)

90,000

Applied overhead

120,000

Ending balance

35,000

All workers are paid the same rate per hour. Factory overhead is applied to Work in Process Inventory on the basis of direct labor hours. The only work left in process at the end of the month had a total of 2,860 direct labor hours accumulated to date.

a. What is the total predetermined OH rate per direct labor hour?

b. If actual total overhead for June is $121,500, what is the amount of underapplied or overapplied overhead?

c. Given your answer to part (b), how would you recommend the over or underap plied overhead be closed?

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