The Excel worksheet form that appears below will reinforce your ability to compute under applied and over applied overhead. It is based on the data pertaining to Turbo Crafters Company that was discussed earlier in the chapter. Download the workbook from Connect, where you will also receive instructions about how to use this worksheet.

You should proceed to the requirements below only after completing your worksheet.
Required:
1. Check your worksheet by changing the estimated total amount of the allocation base in the Data area to 60,000 machine-hours, keeping all of the other data the same as in the original example. If your worksheet is operating properly, the predetermined overhead rate should now be $5.00 per machine-hour. If you do not get this answer, find the errors in your worksheet and correct them.
How much is the under applied (over applied) manufacturing overhead? Did it change? Why or why not?
2. Determine the under applied (over applied) manufacturing overhead for a different company with the following data:
Allocation base ........................................................... Machine-hours
Estimated manufacturing overhead cost ................................. $100,000
Estimated total amount of the allocation base ............50,000 machine-hours
Actual manufacturing overhead cost ........................................ $90,000
Actual total amount of the allocation base . . . . . . . . . ... 40,000 machine-hours
3. What happens to the under applied (over applied) manufacturing overhead from part (2) if the estimated total amount of the allocation base is changed to 40,000 machine-hours and everything else remains the same? Why is the amount of under applied (over applied) manufacturing overhead different from part (2)?
4. Change the estimated total amount of the allocation base back to 50,000 machine-hours so that the data look exactly like they did in part (2). Now change the actual manufacturing overhead cost to $100,000. What is the under applied (over applied) manufacturing overhead now? Why is the amount of under applied (over applied) manufacturing overhead different from part (2)?

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1 Chapter 4: Applying Excel 3 Data 4 Allocation base 5 Estimated manufacturing overhead cost 6 Estimated total amount of the allocation base 7 Actual manufacturing overhead cost 8 Actual total amount of the allocation base Machine-hours $300,000 75,000 machine-hours $290,000 68,000 machine-hours 10 Enter a fomula into each of the cells marked wth a ? below 12 Computation of the predetermined overhead rate 13 Estimated manufacturing overhead cost 14 Estimated total amount of the allocation base 15 Predetermined overhead rate 16 17 Computation of underapplied or overapplied manufacturing overhead 18 Actual manufacturing overhead cost 19 Manufacturing overhead cost applied to Work in Process during the year 20 Predetermined overhead rate 21 Actual total amount of the allocation base 22 Manufacturing overhe ad applied 23 Underapplied (overapplied) manufacturing overhead 24 ? machine-hours ? per machine-hour ? per machine-hour ? machine-hours