Benson Foundry in Charleston, South Carolina, uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the machine hours required. At the beginning of the year, the company expected to incur the following:

Requirements:

1. Compute Benson Foundry’s predetermined manufacturing overhead rate.
2. How much manufacturing overhead was allocated to jobs during the year?
3. How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much?
4. Were the jobs overcosted or undercosted? By how much?

Transcribed Image Text:

Manufacturing overhead costs...... Direct labor cost............ Machine hours........... At the end of the year, the company had actually incurred the following: Direct labor cost...... Depreciation on manufacturing plant and equipment.. Property taxes on plant.......... Sales salaries ........ Delivery drivers' wages Plant janitors' wages. Machine hours...... $ 610,000 $1,500,000 76,250 $1,220,000 $ 470,000 $ 19,000 $ 25,500 $ 14,500 $ 8,000 55,500 hours