Question
Good Doggy Bowtique is a famous Canadian company that produces handmade, durable and unique pet accessories. Each item is created with unique and on-trend fabrics,
Good Doggy Bowtique is a famous Canadian company that produces handmade, durable and unique pet accessories. Each item is created with unique and on-trend fabrics, and then tested to ensure durability for the most active pets. During 2020, the company estimated that the manufacturing overhead costs for the year will be $475,800. The company showed that the actual overhead costs for 2020 to be $493,200. Activity base information for 2020 is presented in the table below:
Activity Base: | Direct Labour Cost | Direct Labour Hours | Machine Hours |
Estimated | $344,780 | 27,500 | 34,600 |
Actual | $362,940 | 29,150 | 35,930 |
Instructions
(a) Compute the predetermined overhead rate for each activity base.
(b) Compute the amount of overhead applied in 2020 for each activity base.
(c) Compute the amount of under- or overapplied overhead for 2020 for each activity base.
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