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Callahan Aquatics manufactures swimming pool equipment. Determine the total overallocation or underallocation of manufacturing overhead during the year. Actual manufacturing costs for the year totalled
Callahan Aquatics manufactures swimming pool equipment. Determine the total overallocation or underallocation of manufacturing overhead during the year. Actual manufacturing costs for the year totalled $2,700,000. (Click the icon to view data.) 1. Assume that Callahan used direct labour hours as the allocation base. 2. Assume that Callahan used the direct labour cost as the allocation base. 3. Assume that Callahan used machine hours as the allocation base. 4. Were there any situations in which jobs were costed correctly? If not, when were they overcosted? When were they undercosted? Manufacturing 0 Data Table ahan used the 2. Determine the direct labour co Manufacturing 3. Determine the machine hours ahan used Manufacturing Total manufacturing overhead rate Actual use overhead allocated $ 67 39,700 $ 2,659,900 208% $1,230,400 $ 2,559,232 $ 83 38,550 $ 3,199,650 Direct labour hours Direct labour dollars Machine hours Manufacturing 4. Were there a undercosted? Vhen were they Print Done In Callahan's na 4010 and 4. Were there any situations in which jobs were costed correctly? If not, when were they overcosted? When were they undercosted? In Callahan's particular case, using direct labour hours as an allocation base overcosted the jobs by 40100 and was the best choice. Using direct labour cost as an allocation was the second best option, causing jobs to be undercosted by $140768 during the year. Using machine hours led to the least accurate allocation because jobs were overcosted by a total of $ 499650
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