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Amora Manufacturing Corp. uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the machine hours required. At the beginning of
Amora Manufacturing Corp. 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: Manufacturing overhead costs 1,440,000 Direct labour cost 720,000 Machine hours 48,000 At the end of the year, the company had actually incurred the following: Direct labour cost $585,000 Depreciation on manufacturing plant and equipment 612,000 Property taxes on plant 225,000 Sales salaries 10,800 Delivery drivers wages 7,200 Plant janitors wages 90,000 Machine hours 34,200 hours Required: 1. Compute Amora's predetermined overhead rate. 2. How much manufacturing overhead was allocated to jobs during the year? 3. How much manufacturing overhead was incurred during the year? 4. Is manufacturing overhead over allocated or under allocated at the end of the year and by how much? 5. What will Amora do with the over or under applied manufacturing overhead
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