Amberiack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs.The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours
Actual and estimated data for manufacturing overhead.direct labor cost,direct labor hours,and machine hours for the most recent fiscal year are summarized here:
Estimated Value $587,000
Actual Value $648,000 $443,000 17,300 hours 7,800 hours
Manufacturing overhead cost Direct labor cost Direct labor hours Machine hours
15,800 hours 6,800 hours
Required:
1. Based on the company's current allocation base (direct labor hours), compute the following: a.Predetermined overhead rate Note: Round your answer to 2 decimal places. b.Applied manufacturing overhead. Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. c.Over-or underapplied manufacturing overhead Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. 2. If the company had used direct labor dollars (instead of direct labor hours) as its allocation base, compute the following: a.Predetermined overhead rate. Note:Round your answer to 2 decimal places,i.e.3.63% b.Applied manufacturing overhead. Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. c.Over- or underapplied manufacturing overhead. Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount 3.If the company had used machine hours (instead of direct labor hours) as its allocation base,compute the following a.Predetermined overhead rate Note:Round your answer to 2 decimal places. b.Applied manufacturing overhead Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount c.Over-or underapplied manufacturing overhead Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. 4.Based on last year's data alone.which allocation base would have provided the most accurate measure for applying manufacturing overhead costs to production?
Answer is complete but not entirely correct
1a.Predetermined Overhead Rate
37.15 per DLH s 642,730 Underapplied by 5,305 150.90 % of direct labor cost 668,930 Overapplied by (20,900 $ 86.32 per machine hour 673,324 Overapplied by 25,324 Direct Labor Hours
1b. Applied Manufacturing Overhead
1c.Manufacturing Overhead
2a. Predetermined Overhead Rate
2b. Applied Manufacturing Overhead
2c. Manufacturing Overhead
3a. Predetermined Overhead Rate 3b. Applied Manufacturing Overhead 3c.Manufacturing Overhead
4. Most accurate measure
