hammatt inc provides a variety of services for commercial clien 267688

Hammatt Inc. provides a variety of services for commercial clients. Hammatt destroys any paper client records after seven years and the shredded paper is sold to a recycling company. The net realizable value of the recycled paper is treated as a reduction to operating overhead. The following data pertain to 2010 operations:

Budgeted operating overhead ………………………….$415,200

Actual operating overhead ……………………………..$410,500

Budgeted net realizable value of recycled paper ……… $9,200

Actual net realizable value of recycled paper …………. $9,700

Budgeted billable hours ……………………………….. 70,000

Actual billable hours …………………………………… 70,900

a. Assuming that number of billable hours is the allocation base, what was the company’s predetermined overhead rate?

b. Record the journal entry for the sale of the recycled paper.

c. What was the company’s underapplied or overapplied overhead for 2010? 34.