Let’s solve the problem step by step.

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1. Calculate the predetermined overhead rate

The predetermined overhead rate (POHR) is calculated as:

$\text{POHR} = \frac{\text{Estimated Total Overhead}}{\text{Estimated Total Direct Labor Hours}}$

Given:

• Estimated Total Overhead = $12,000,000
• Estimated Total Direct Labor Hours = 400,000 hours

$\text{POHR} = \frac{12,000,000}{400,000} = 30 \, \text{per direct labor hour}$

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Answer 1: $30 per direct labor hour

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2. Calculate Orcasa’s over- or under-applied overhead for April

To determine whether the overhead is over- or under-applied, follow these steps:

1. Calculate the applied overhead for April: $\text{Applied Overhead} = \text{POHR} \times \text{Actual Direct Labor Hours}$ Given:

   • POHR = $30 per direct labor hour
   • Actual Direct Labor Hours (April) = 40,000 hours

   $\text{Applied Overhead} = 30 \times 40,000 = 1,200,000$

2. Compare applied overhead with actual overhead:

   • Actual Overhead (April) = $1,125,000
   • Applied Overhead (April) = $1,200,000

   $\text{Difference} = \text{Applied Overhead} - \text{Actual Overhead} = 1,200,000 - 1,125,000 = 75,000$

Since the applied overhead is greater than the actual overhead, this is an over-applied overhead.

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Answer 2: Orcasa over-applied overhead by $75,000 for the month of April.

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Summary:

1. Predetermined Overhead Rate: $30 per direct labor hour
2. Over-applied Overhead: $75,000

Let me know if you’d like further clarification or more details!

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Here are 5 related questions to expand your understanding:

1. What is the impact of over- or under-applied overhead on financial statements?
2. How can a company adjust for over- or under-applied overhead at the end of the year?
3. What are some factors that could cause overhead to be over- or under-applied?
4. How can Orcasa, Inc., improve its overhead allocation process?
5. How does predetermined overhead rate affect job costing in manufacturing?

Tip: Regularly revisiting your estimates and actual data can help improve the accuracy of your overhead application.