Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here:

	Estimated Value				Actual Value
Manufacturing overhead cost	$	594,000			$	655,000
Direct labor cost	$	396,000			$	450,000
Direct labor hours		16,500	hours			18,000	hours
Machine hours		7,500	hours			8,500	hours

Required: 1. Based on the companys current allocation base (direct labor hours), compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead.

c. Over- or underapplied manufacturing overhead.

2. If the company had used direct labor dollars (instead of direct labor hours) as its allocation base, compute the following:

a. Predetermined overhead rate. b. Applied manufacturing overhead. c. Over- or underapplied manufacturing overhead.

3. If the company had used machine hours (instead of direct labor hours) as its allocation base, compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead.

c. Over- or underapplied manufacturing overhead.

4. Based on last years data alone, which allocation base would have provided the most accurate measure for applying manufacturing overhead costs to production?

1a. Predetermined Overhead Rate per direct labor hour 1b. Applied Manufacturing Overhead 1c. Manufacturing Overhead 2a. Predetermined Overhead Rate % of direct labor cost 2b. Applied Manufacturing Overhead 2c. Manufacturing Overhead 3a. Predetermined Overhead Rate 3b. Applied Manufacturing Overhead 3c. Manufacturing Overhead per machine hour 4. Most accurate measure