ACC 206 Week 3 Problem 1 Overhead application Working backward (Updated October 2013).

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. Overhead application: Working backward

The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review:

 Division A Division B

Actual machine hours 26,500 ?

Estimated machine hours 20,000 ?

Overhead application rate $5.00 $6.00

Actual overhead $120,000 ?

Estimated overhead ? $90,000

Applied overhead ? $87,000

Over- (under-) applied overhead ? $8,500

 FIND THE UNKNOWN FOR EACH OF THE DIVISIONS.