The Collins Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the . basis of the cost of materials used in production. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined overhead rate for the year: Manufacturing overhead Direct materials cost $400,000 $250,000 The following transactions took place during the year (all purchases and services were acquired on account): 1) Raw materials purchased on account: $90,000. 2) Raw materials requisitioned for use in production: $150,000 (95% direct and the balance indirect). 3) The following employee costs were incurred and paid for: Direct labour: $200,000 Indirect labour: $100,000 Administrative salaries: $125,000 4) Maintenance costs incurred in the factory: $25,000. 5) Rental costs incurred on the buildings: $75,500, of which 80% relates to factory assets and the remainder elates to selling and administrative assets. Manufacturing overhead was applied to jobs based on actual direct material costs. Chapter formulas Predetermined overhead rate = Estimated total manufacturing overhead costs/Estimated total units in the allocation base Overhead applied to a particular job = Predetermined overhead rate x Amount of allocation base incurred by job auired: 22 23 Required: 24 Part 1: Calculate the total amount of actual overhead charged to manufacturing overhead. (2 marks) 25 26 27 28 29 30 31 Total actual manufacturing overhead 32 33 34 Part 2: Calculate the over or under-applied overhead. (5 marks) 35 36 37 38 39 401 41 Supporting calculations