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Windsor Company uses activity-based costing to determine product costs. Some of the entries have been completed to the manufacturing overhead account for the current year,

Windsor Company uses activity-based costing to determine product costs. Some of the entries have been completed to the manufacturing overhead account for the current year, as shown by entry (a) below:

Manufacturing Overhead
(a)2,302,000

Required:

1. What does entry (a) represent?

multiple choice

  • Overhead applied or,

  • Machine-hours or,

  • Actual manufacturing overhead cost incurred

2. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:

Activity Cost PoolActivity MeasureEstimated
Overhead Cost
Expected Activity
Labour relatedDirect labour-hours$592,00037,000DLHs
Purchase ordersNumber of orders44,0801,520orders
Parts managementNumber of part types363,000398part types
Board etchingNumber of boards451,0002,010boards
General factoryMachine-hours670,32079,800MHs

Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. (Note: Round your final answers to 1 decimal place).

Activity Cost PoolActual Activity
Labour related_________ per direct labour-hours
Purchases orders_________ per order
Parts management_________ per part type
Board etching_________ per board
General factory_________ per machine-hours

3. During the year, actual activity was recorded as follows:

Activity Cost PoolActual Activity
Labour related40,300DLHs
Purchase orders1,280orders
Parts management418part types
Board etching2,110boards
General factory81,000MHs

Determine the amount of manufacturing overhead cost applied to production for the year. (Note: Round intermediate calculations to 1 decimal place and final answers to the nearest whole dollar amount).

Activity Cost PoolApplied Overhead
Labour related
Purchase orders
Parts management
Board etching
General Factory
Total$ 0

4. Determine the amount of underapplied or overapplied overhead cost for the year. (Note: Round intermediate calculations to 1 decimal place and final answers to the nearest whole dollar amount).

overhead cost

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