Ekpro Products manufactures containment chambers for environmentally friendly incinerators. Each chamberis built to customer specifications. Most of the direct labor time is spent on welding activities. Following isthe job cost sheet for an incinerator manufactured for Benzate Corporation:

(a) What types of costs do you imagine would be included in factory overhead? If overhead is appliedbased on direct labor hours, what is the application rate?

(b) Ekpro is considering installation of a robotic machine that will do all welding operations. Howmight this decision impact the total overhead and the application method?

(c) How does the applied overhead relate to the actual overhead? When they are not the same, whathappens to the difference? Why is actual overhead not assigned to each job?

B-19.04 Determining and evaluating applied overhead Ekpro Products manufactures containment chambers for environmentally friendly incinerators. Each chamber is built to customer specifications. Most of the direct labor time is spent on welding activities. Following is the job cost sheet for an incinerator manufactured for Benzate Corporation: Ekpro Job: Job Cost Sheet Benzate Direct Labor Hours Rate Total Direct Material Qty. Unit Cost Total Applied Overhead Qty. Rate Total Total May 8, 20X7 Rod Burner 9 $25 $225 $225 Sandy Sharp 1 $12 $12 $12 Steel 10 $80 $800 $800 May 9, 20X7 Sandy Sharp 2 $12 $24 $24 Applied Overhead ? 12.00 $261 $800 ? $360 $360 $360 $1,421 (a) What types of costs do you imagine would be included in factory overhead? If overhead is applied based on direct labor hours, what is the application rate? (b) Ekpro is considering installation of a robotic machine that will do all welding operations. How might this decision impact the total overhead and the application method? (c) How does the applied overhead relate to the actual overhead? When they are not the same, what happens to the difference? Why is actual overhead not assigned to each job