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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
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
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