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Chapter 3: Applying Excel Data Allocatio...

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Chapter 3: Applying Excel Data Allocation base Machine-hours Estimated manufacturing overhead cost $300,000 Estimated total amount of the allocation base 75,000 machine-hours Actual manufacturing overhead cost $290,000 Actual total amount of the allocation base 68,000 machine-hours Enter a formula into each of the cells marked with a ? below Computation of the predetermined overhead rate Estimated manufacturing overhead cost $300,000 Estimated total amount of the allocation base 75,000 machine-hours Predetermined overhead rate ? per machine-hour Computation of underapplied or overapplied manufacturing overhead Actual manufacturing overhead cost ? Manufacturing overhead cost applied to Work in Process during the year: Predetermined overhead rate ? per machine-hour Actual total amount of the allocation base ? machine-hours Manufacturing overhead applied ? Underapplied (overapplied) manufacturing overhead ? 1. Check your worksheet by changing the estimated total amount of the allocation base in the Data area to 60,000 machine-hours, keeping all of the other data the same as in the original example. If your worksheet is operating properly, the predetermined overhead rate should now be $5.00 per machine-hour. If you do not get this answer, find the errors in your worksheet and correct them. How much is the underapplied (overapplied) manufacturing overhead? Did it change? Why or why not? 2. Determine the underapplied (overapplied) manufacturing overhead for a different company with the following data: Allocation base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Machine-hours Estimated manufacturing overhead cost . . . . . . . . . . . . . . . . $100,000 Estimated total amount of the allocation base . . . . . . . . . . . 50,000 machine-hours Actual manufacturing overhead cost . . . . . . . . . . . . . . . . . . $90,000 Actual total amount of the allocation base . . . . . . . . . . . . . . 40,000 machine-hours 3. What happens to the underapplied (overapplied) manufacturing overhead from part (2) if the estimated total amount of the allocation base is changed to 40,000 machine-hours and everything else remains the same? Why is the amount of underapplied (overapplied) manufacturing overhead different from part (2)? 4. Change the estimated total amount of the allocation base back to 50,000 machine-hours so that the data looks exactly like it did in part (2). Now change the actual manufacturing overhead cost to $100,000. What is the underapplied (overapplied) manufacturing overhead now? Why is the amount of underapplied (overapplied) manufacturing overhead different from part (2)?

 

Paper#7814 | Written in 18-Jul-2015

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