From a list of companies below select one that would use a job-order costing system.

1. Manufacturer of swimming pool chemicals.
2. Manufacturer of custom hot tubs and spas.
3. Manufacturer of ceramic tile.
4. Producer of yogurt.
5. Home builders
6. Manufacturer of custom tool sheds.
7. Manufacturer of papers clips.
8. Manufacturer of balloons.
9. Manufacturer of custom emergency rescue vehicles.

For the company you selected answer the following:

1. What company did you select?
2. What factors should be considered in selecting an allocation base to be used in computing a predetermined overhead rate.
3. Would you expect the amount of applied overhead for a period to equal the actual overhead cost of the period? Why or Why not?
4. Provide two reasons why overhead might be underapplied in a given period.