Patel Foundry in Denver, Colorado, uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the machine hours required. At the beginning of the year, the company expected to incur the following: 

Requirements 

1. Compute Patel's predetermined manufacturing overhead rate 

2. How much manufacturing overhead was allocated to jobs during the year? 

3. How much manufacturing overhead was incurred during the year? Is manufacturing overhead under allocated or overallocated at the end of the year? By how much? 

4. Were the jobs over costed or under costed? By how much?

Data Table Manufacturing overhead costs Direct labor cost. Machine hours.. $ 640,000 $ 1,500,000 80,000 At the end of the year, the company had actually incurred the following: Direct labor cost. Depreciation on manufacturing plant and equipment Property taxes on plant. Sales salaries Delivery drivers' wages Plant janitors' wages. Machine hours. Print Done $ EA 69 - X 69 1,230,000 500,000 19,500 23,000 13,500 9,000 57,000 hours Data Table Manufacturing overhead costs Direct labor cost. Machine hours.. $ 640,000 $ 1,500,000 80,000 At the end of the year, the company had actually incurred the following: Direct labor cost. Depreciation on manufacturing plant and equipment Property taxes on plant. Sales salaries Delivery drivers' wages Plant janitors' wages. Machine hours. Print Done $ EA 69 - X 69 1,230,000 500,000 19,500 23,000 13,500 9,000 57,000 hours