Question

Score: 0 of 1 pt 5 of 13 (3 complete) HW Score: 18.75%, 3 of 16 pts S3-9 (book/static) Question Help Adam Industries manufactures wooden backyard playground equipment. Adam estimated $1,800,000 of manufacturing overhead and $2,000,000 of direct labor cost for the year. After the year was over, the accounting records indicated that the company had actually incurred $1,660,000 of manufacturing overhead and $2,650,000 of direct labor cost. 1. Calculate Adam's predetermined manufacturing overhead rate, assuming that 2. How much manufacturing overhead would have been allocated to manufacturing 3. At year-end, was manufacturing overhead overallocated or underallocated? By the company uses direct labor cost as an allocation base. jobs during the year? how much? 1. Calculate Adam's predetermined manufacturing overhead rate, assuming that the company uses direct labor cost as an allocation base. (Round the percentage to the nearest hundredth percent, X.X.) Predetermined manufacturing overhead rate

Answer 1

Ques 1
Estimated manufacturing overhead costs	/	Estimated direct labor cost	=	Predetermined manufacturing overhead rate
1,800,000		2,000,000		90.00%
Ques 2
Actual direct labor costs	x	Predetermined manufacturing overhead rate	=	Manufacturing overhead allocated
2,650,000		90.00%		2,385,000
Ques 3
Manufacturing Overhead
Actual		1,660,000		Allocated		2,385,000
				End Bal		725,000
there is overallocation by $725,000