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Callahan Pools manufactures swimming pool equipment. Callahan has estimated the following manufacturing overhead rates using different independent situations EB (Click the icon to view the rates.) Determine the total manufacturing overhead allocated to Callahans manufacturing jobs in the following independent situations 1 Assume that the company actually used 16,400 direct labor hours. 2. Assume that the company actually incurred $982,500 of direct labor cost. 3.Assume that the company actually ran the machines 11,850 hours. 4. Briefly explain what you have learned about the total manufacturing overhead allocated to production 1. Determine the total manufacturing overhead allocated to Callahans manufacturing jobs assuming that the company actually used 16,400 direct labor hours Enter the formula and compute the total manufacturing overhead allocated to Callahans manufacturing jobs Manufacturing - overhead allocatedData Table 1 Estimated manufacturing Estimated quantity Predetermined of allocation base overhead rate Direct labor hours Direct labor dollars Machine hours $ $ S overhead costs 1,200,000 ,200,000 1,200,000 16,000 $ 960,000 12,500 $75.00 per DL hour 125% of DL cost $96.00 per MH Print Done

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1 Actual direct labor hours x Predetermined overhead rate = Manufacturing overhead allocated
                            16,400 x $   75.00 = $                  1,230,000
2 Actual direct labor cost x Predetermined overhead rate = Manufacturing overhead allocated
$ 982,500 x 125% = $                  1,228,125
3 Actual machine hours x Predetermined overhead rate = Manufacturing overhead allocated
                            11,850 x $ 96.00 = $                  1,137,600
4. The total amount of manufacturing overhead allocated during the year is dependent upon two factors the allocation base used and the actual quantity of the base used.
As a result, a company could either overallocate or underallocate manufacturing overhead depending on the allocation base used and the actual manufacturing overhead for the year.
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