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Blue Spruce Company produces one product, a putter called
GO-Putter. Blue Spruce uses a standard cost system and
determines that it should take one hour of direct labor to produce
one GO-Putter. The normal production capacity for this putter
is 82,000 units per year. The total budgeted overhead at
normal capacity is $697,000 comprised of $205,000 of
variable costs and $492,000 of fixed costs. Blue
Spruce applies overhead on the basis of direct labor
hours.

During the current year, Blue
Spruce produced 77,900 putters,
worked 77,100 direct labor hours, and incurred variable
overhead costs of $209,900 and fixed overhead costs of
$492,000.
(a)
Correct answer icon
Your answer is correct.
Compute the predetermined variable overhead rate and the
predetermined fixed overhead rate. (Round answers
to 2 decimal places, e.g. 2.75.)
Variable
Fixed
Predetermined Overhead Rate
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(b)
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Your answer is incorrect.
Compute the applied overhead for Blue Spruce for the
year.
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