Answer:
Underapplied overhead = Actual overhead - Applied overhead
$7,200 = $392,000 - Applied overhead
Applied overhead = $392,000 - $7,200
Applied overhead = $384,800
Applied Overhead = Overhead application rate x Actual labour hours
$384,800 = $8 x Actual labour hours
$384,800 = Actual labour hours
$8
Actual labour hours = 48,100 hours
Explanation:
In this question, we need to determine the overhead applied by using the underapplied overhead formula. The underapplied overhead and actual overhead were given, then, we will make overhead applied the subject of the formula. In the second case, we will derive the actual labour hours by dividing the overhead applied by overhead application rate.
