Homework: Chapter 3
Question 10, E3-45B (
Part 4 of 6
Young Foundry in Rochester, New York, uses a predetermined manufacturing overhead rate to allocate overhead
expected to incur the following:
View the costs.
Read the requirements.
Costs
Manufacturing overhead costs
Direct labor cost
Machine hours
$ 590,000
$ 1,400,000
73,750
At the end of the year, the company had actually incurred the following:
Direct labor cost...
$ 1,210,000
Requirement 1. Compute Young's predetermined manufacturing overhead rate.
Determine the formula to calculate the predetermined overhead rate, then calculate the rate.
Estimated yearly overhead costs
Depreciation on manufacturing plant and equipment
$ 475,000
Property taxes on plant
$ 18,000
Sales salaries...
$ 26,500
$ 590,000
Estimated yearly machine hours
73,750
Predetermined overhead
Delivery drivers' wages...
$ 13,000
$ 8 per machine
Plant janitors' wages...
$ 11,000
Requirement 2. How much manufacturing overhead was allocated to jobs during the year?
Determine the formula to calculate the overhead to be allocated, then calculate the manufacturing overhead allocated.
Machine hours...
56,500 hours
Predetermined overhead rate
8
Actual machine hours
56500
Manufacturing
overhead allocated
$ 452,000
Print
Done
Requirement 3. How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much? (If an input field is not used in
the table, leave the input field empty; do not select a label or enter a zero.)
Depreciation on manufacturing plant and equipment
475000
Property taxes on plant
18000
Total manufacturing overhead