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Logan Products computes its predetermined overhead rate annually on the basis of machine-hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $348,000 and machines would be run a total of 20,000 hours. Its actual total manufacturing overhead for the year was $336,400 and its actual total machine-hours was 19,500 hours.
Required:
Compute the company's predetermined overhead rate for the year, calculate the total overhead applied, and determine the amount of under or over applied overhead in the year.
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