Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Return to qui Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always

image text in transcribed

image text in transcribed

image text in transcribed

Return to qui Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours. Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here: Manufacturing overhead cost Direct labor cost Direct labor hours Machine hours Estimated Value $ 586,000 $ 388,000 15,700 hours 6,700 hours Actual Value $ 647,000 $ 442,000 17,200 hours 7,700 hours Required: 1. Based on the company's current allocation base (direct labor hours), compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) Ret swer to Required: 1. Based on the company's current allocation base (direct labor hours), compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answ the nearest whole dollar amount.) 2. If the company had used direct labor dollars (instead of direct labor hours) as its allocation base, compute the following: a. Predetermined overhead rate. (Round your answer to 2 decimal places, i.e. 3.63%) b. Applied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) 3. If the company had used machine hours (instead of direct labor hours) as its allocation base, compute the following a. Predetermined overhead rate. (Round your answer to 2 decimal places.) b. Applied manufacturing overhead. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) c. Over- or underapplied manufacturing overhead (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) & Answer is complete but not entirely correct. 1a. $ 37.32 per direct labor hour Predetermined Overhead Rate Applied Manufacturing Overhead Manufacturing Overhead $ 641,987 X Underapplied by 151.03 $ 5,013 % of direct labor cost 2a. Predetermined Overhead Rate 2b $ 667 557 X 20 Overapplied by $ 20,557 87 46 0 per machine hour . Applied Manufacturing Overhead Manufacturing Overhead Predetermined Overhead Rate Applied Manufacturing Overhead Manufacturing Overhead Most accurate measure 3b $ 673.463 $ 26.463 X Overapplied by Direct Labor Hours 4

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Wiley CIA Essentials Of Internal Auditing Exam Review 2022 Part 1

Authors: S. Rao Vallabhaneni

1st Edition

1119846285, 978-1119846284

More Books

Students also viewed these Accounting questions

Question

4. Support and enliven your speech with effective research

Answered: 1 week ago

Question

3. Choose an appropriate topic and develop it

Answered: 1 week ago