Question

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $242,400 and 7,400 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $243,800 and actual direct labor-hours were 5,500. The overhead for the year was: (Round your intermediate calculations to 2 decimal places.) Garrison 16e Rechecks 2017-08-28

Answer 1

Instructions are listed below

Step-by-step explanation:

Giving the following information:

At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $242,400 and 7,400 estimated direct labor-hours.

Actual manufacturing overhead for the year amounted to $243,800 and actual direct labor-hours were 5,500.

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead/ total amount of allocation base

Predetermined manufacturing overhead rate= 242000/7400= $32.70

Allocated overhead= overhead rate*actual hours= 32.7*5500= $179,850

Over/under allocation= actual overhead - allocated overhead= 243800 - 179850= 63950 underallocated