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At the end of the construction year for his business, Evan's uncle Paul is having trouble dealing with the company's indirect costs as

there are just so many of them! To help his uncle $($and because he hopes to take over the family business one day$),$ Evan listed a few

examples of what he thought would be indirect costs for this company: glue, nails, staples, drywall compound, and tape. Paul then

added supervisor costs, as well as depreciation of the construction trucks, generators, saws, and other equipment, to the list.

Unfortunately, the total of these MOH costs, $$521,000,$ significantly exceeded Paul's budgeted MOH of $$448,500.$

In the past, Paul assigned MOH costs to individual jobs based on the direct labor hours of his employees. At the beginning of the year,

based on the work he had planned and still hoped to earn at that time, Paul budgeted for $138,000DL$ hours. In reviewing the payroll

records of his employees, Paul now sees that they actually worked $153,000$ hours this year while receiving an average wage of $$15$ per

hour. Wow, business must be good!

Based on the above information, determine the budgeted MOH rate based on DL hours, apply MOH for the year, and determine

under$-$ or overapplied MOH for the year. $($Round MOH rate answer to $2$ decimal places, e$.$g$.52\mathrm{.}75.)$

Budgeted MOH rate

$

$/$DL hour

Applied MOH

$

Difference

$

Evan wondered if his uncle should consider a different allocation base, since this construction business is both labor$-$intensive and

material$-$intensive. Paul agrees and determines that total DM costs incurred for the jobs worked on this year amounted to

$$1,233,000.$ At the beginning of the year, Paul's budgeted DM costs $($for the projects he knew about at the time$)$ were $$897,000.$

Determine what the budgeted MOH rate would have been if Paul had used direct material cost as the cost driver. Further,

determine applied MOH and under$-$ or overapplied MOH for this scenario. $($Round MOH rate answer to $2$ decimal places, eg$.52\mathrm{.}75.)$

Budgeted MOH rate

$

$\frac{?}{DM}$$

Applied MOH

$

Difference

$

Which cost driver would you recommend Paul use going forward?

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