Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $325,000 and machine hours to be 25,000. Actual manufacturing overhead and machine hours were $372,000 and 26,000, respectively.
1. Compute the predetermined overhead rate per machine hour?
2. Compute applied manufacturing overhead?
3. Compute over- or underapplied manufacturing overhead.
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