Cost Flows in Activity-Based Costing (L02, L05)

Sylvan Company uses activity-based costing to determine product costs for external financial reports. The company's partially completed Manufacturing Overhead T-account for the current year is shown below:

Required:
1 . What does the entry

(a) above represent?
2. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:
Activity Cost Pool Labor related Activity Measure Direct labor-hours Estimated Overhead Cost $280,000 $90,000 $120,000 $360,000 $400,000 Expected Activity 40,000 DLHs 1 ,500 orders 400 part types 2,000 boards 80,000 MHs Purchase orders Parts management . . .
Board etching General factory . . Number of orders Number of part types . . Number of boards . . Machine-hours Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools.
3. During the year, actual activity was recorded as follows:
Activity Cost Pool Actual Activity Labor related 41 ,000 DLHs Purchase orders 1 ,300 orders Parts management 420 part types Board etching 2,1 50 boards General factory 82,000 MHs Determine the amount of manufacturing overhead cost applied to production for the year.
4. Determine the amount of underapplied or overapplied overhead cost for the year.

Transcribed Image Text:

(a) Manufacturing Overhead 1,302,000