ACME Housing received custom orders for 120 Bungalows and 80 Luxury homes on January 1^st, 2017. These were their only orders for the year, all were delivered and payment of $250,000 per bungalow and 550,000 per Luxury Home was received before December 31^st 2017.

Direct Material Cost per Bungalow was $90,000 and for each Luxury home $150,000.

Estimated annual Manufacturing Overhead costs were $1,250,000 and Direct Labour Hours (DLH) were estimated to be 200,000 hours payable at a rate of $32/hour.

ACME decided to use DLH as an Allocation Base for both jobs.

The actual overhead costs incurred for the year was $1,700,000. The actual Direct Labour Hours used for the year to produce the Bungalows totaled 150,000 hours and 110,000 for the Luxury homes, at $32/hour.

In addition, ACME Housings Headquarters, where the Sales, Accounting and HR departments worked, incurred costs of $15,000,000 for the year 2017.

Required:

1. What is the predetermined overhead rate rounded to 2 decimal places? (4 marks)

2. How much overhead was applied to:

5. Bungalows? (2 marks)

5. Luxury Homes? (2 marks)

3. Provide the journal entry to clear the Manufacturing Overhead account (4 marks).

4. Prepare an Income Statement for the year 2017 (5 marks)