Question
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) | 2,306,000 | |||
Required:
1. What does entry (a) represent?
multiple choice
Overhead applied
Machine-hours
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 Pool | Activity Measure | Estimated Overhead Cost | Expected Activity | |||
Labour related | Direct labour-hours | $ | 546,000 | 42,000 | DLHs | |
Purchase orders | Number of orders | 39,520 | 1,520 | orders | ||
Parts management | Number of part types | 360,000 | 396 | part types | ||
Board etching | Number of boards | 452,000 | 2,000 | boards | ||
General factory | Machine-hours | 594,000 | 79,200 | MHs | ||
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).
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3.. During the year, actual activity was recorded as follows:
Activity Cost Pool | Actual Activity | |
Labour related | 39,900 | DLHs |
Purchase orders | 1,290 | orders |
Parts management | 420 | part types |
Board etching | 2,170 | boards |
General factory | 82,600 | MHs |
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).
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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).
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