Mendoza Home Builders, Inc., specializes in the construction of large family homes. The company applies overhead to each home it builds on the basis of the direct labor cost incurred on the job site. The budgeted total direct labor costs for the coming year amount to $5,000,000. A list of the budgeted overhead costs is presented below.

Budgeted Overhead Costs
Indirect laborhourly workers	$1,000,000
Indirect laborsupervisor salaries	400,000
Equipment repairs and maintenance	350,000
Indirect materials	250,000
Licenses, permits, and taxes	100,000
Waste disposal	75,000
Equipment depreciation	50,000
Materials and equipment storage	20,000
Small tools lost or broken	12,000
Other miscellaneous overhead	43,000

Open the Excel file SA19-2_2e.

Calculate the predetermined overhead application rate for the coming year.

When you have completed determining the overhead application rate, perform a save as, replacing the entire file name with the following: SA19-2_2e[your first name initial]_[your last name]

To calculate predetermined factory overhead rate in problem SA 19-2, the following inputs are used?

a.Total budgeted overhead costs divided by total direct labor cost

b.Total direct labor cost divided by total budgeted overhead costs

c.Total budgeted overhead costs times total direct labor cost

d.Total direct labor cost times total budgeted overhead costs

Sandstone Manufacturing Company operates three production facilities in the state of New Mexico. Because manufacturing operations are heavily automated, the company uses machine hours as the factory overhead allocation base. The estimated annual overhead costs and the budgeted number of machine hours for each of these facilities are as follows:

	Manufacturing Facility
	Santa Fe		Clovis		Roswell
Estimated annual factory overhead cost	$1,670,000		$1,394,000		$1,200,000
Estimated total machine hours	1,000,000		820,000		750,000

Calculate the predetermined factory overhead application rates that would be used in each of these manufacturing plants during the coming year.

Open the Excel file SA19-3_2e.

Calculate the predetermined overhead rate for the coming year for each manufacturing plant.

When you have completed determining the overhead application rate, perform a save as, replacing the entire file name with the following: SA19-3_2e[your first name initial]_[your last name]

In problem SA 19-3, what facility has the largest predetermined factory overhead rate?

a.Santa Fe

b.Clovis

c.Roswell

nputs: Manufacturing Facility Santa Fe Clovis Roswell Estimated annual factory overhead cost Estimated total machine hours Output: Predetermined factory overhead rate per machine hour, a. Enter each of the estimated total overhead costs for each of the factories in the Inputs area b. Enter the estimated total number of machine hours for each factory in the Inputs area. c. Enter in B8 the formula that divides total overhead cost by the number of direct labor hours d. Once this formula has been entered in a cell (B8), it can be copied and pasted into the adjacent cells to complete the worksheet