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Great Scott Manufacturing uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the direct labour cost required. At the
Great Scott Manufacturing uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the direct labour cost required. At the beginning of the year, the company expected to incur the following: Manufacturing overhead costs Direct labour cost $1,200,000 $600,000 Machine hours 40,000 hours At the end of the year, the company had actually incurred the following: Direct labour cost $650,000 Depreciation on manufacturing plant and $680,000 equipment Property taxes on plant $250,000 Sales salaries $12,000 Delivery driver's wages $8,000 Plant janitors' wages Machine hours $100,000 28,500 hours Required: 1. Compute Great Scott Corporation's predetermined overhead rate 2. How much manufacturing overhead was allocated to jobs during the year? 3. How much manufacturing overhead was incurred during the year? 4. Is manufacturing overhead over allocated or under allocated at the end of the year and by how much?
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