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Chapter 17: Q.17-21E-b (page 944)

The manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:

Overhead allocated to production

\(409,200

Actual manufacturing overhead cost

432,000

Predetermined overhead allocation rate

\)44 per machine hours

Requirements

2. Was manufacturing overhead overallocated or underallocated for the year, and by how much?

Short Answer

Expert verified

The underallocated overhead for the year is $22,800

Step by step solution

01

Machine hours

Machine hours is a measurement which is used to apply the manufacturing overhead to the manufactured goods of the company.

02

Underallocation of overhead

underallocatedoverhead=actualoverhead-allocatedoverhead=$432,000-$409,200=$22,800

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Most popular questions from this chapter

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

e. A computer repair service that makes service calls to homes.

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

c. A company that manufactures thousands of identical files.

Analyze the following T-accounts to determine the amount of direct and indirectmaterials used.

Raw material inventory

Work in process inventory

Question: Smith Company expected to incur \(10,000 in manufacturing overhead costs and use 4,000 machine hours for the year. Actual manufacturing overhead was \)9,700, and the company used 4,250 machine hours.

9. Calculate the predetermined overhead allocation rate using machine hours as the allocation base.

10. How much manufacturing overhead was allocated during the year?

Comparing actual to allocated overhead

Columbus Enterprises reports the following information at December 31, 2018:

Manufacturing overhead

3,500

50,600

19,000

34,500

Requirements

1. What is the actual manufacturing overhead of Columbus Enterprises?
See all solutions

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