Question
Dimopoulos Pools manufactures swimming pool equipment. Estimated manufacturing Estimated quantity Predetermined Allocated overhead costs of allocation base overhead rate overhead Direct labor hours $ 1,300,000
Dimopoulos Pools manufactures swimming pool equipment.
| | Estimated manufacturing | Estimated quantity | Predetermined | Allocated | |||||
| | overhead costs | of allocation base | overhead rate | overhead | |||||
| Direct labor hours | $1,300,000 | 50,000 | $26.00 per DL hour | $1,357,200 | |||||
| Direct labor cost | $1,300,000 | $1,000,000 | 130% of DL cost | $1,332,500 | |||||
| Machine hours | $1,300,000 | 65,000 | $20.00 per MH | $1,276,000 | |||||
Determine the total overallocation or underallocation of manufacturing overhead during the year in the following independent situations. Actual manufacturing costs for the year for Dimopoulos Pools totaled$1,325000.
| 1. | Assume that the company used direct labor hours as the allocation base. |
| 2. | Assume that the company used the direct labor cost as the allocation base. |
| 3. | Assume that the company 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? |
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