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The Reed Division reports the following operating data for the past two years: Year 1 Year 2 Margin 16% ? Turnover 2.5 2 Average operating
The Reed Division reports the following operating data for the past two years: Year 1 Year 2 Margin 16% ? Turnover 2.5 2 Average operating assets ? %150,000 Net operating income $40,000 ? Stockholders' equity $80,000 $125,000 Sales ? ? The return on investment at Reed was exactly the same in Year 1 and Year 2. The margin in Year 2 (refer to previous question) was: 48% Malcolm Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. On September 1, the estimates for the month were: Manufacturing overhead $17,000 Direct labor-hours 13,600 During September, the actual results were: Manufacturing overhead $18,500 Direct labor-hours 12,000 * The cost records for September will show: Underapplied overhead of $3,500 Overapplied manufacturing overhead of $1.500 Underapplied overhead of $1.500 Overapplied manufacturing overhead of $3.500
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