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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
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: Manufacturing overhead cost Direct labor cost Direct labor hours Machine hours Estimated Value $ 593,000 $ 395,000 16,400 hours 7,400 hours Actual Value $ 654,000 $ 449,000 17,900 hours 8,400 hours Doamirod. 1a. Predetermined Overhead Rate per direct labor hour 1b. Applied Manufacturing Overhead 1c. Manufacturing Overhead 2a. Predetermined Overhead Rate 2b. Applied Manufacturing Overhead 2c. Manufacturing Overhead % of direct labor cost 3a. Predetermined Overhead Rate per machine hour 3b. Applied Manufacturing Overhead 3c. Manufacturing Overhead 4. Most accurate measure
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