Question

Classic Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses, Classic Uniforms reports the following cost data for the past year EEB (Click the icon to view the cost data.) Read the recuirements Requirement 1. Compute the predetermined manufacturing overhead rate. Enter the formula for predetermined manufacturing overhead rate, then compute the rate Predetermined overhead rate Data Table Requirements Budget 7,000 hours 6,300 hours 6.700 hours 6600 hours Actual Direcl labor hours Machine hours Depreciation on salespeaple's auos Indirect materials Depreciation on frucks used lo deliver uniforms 1. Compule the predelermined manufacturing overhaad rate. 2. Calculate the allocaled manufacturing averhead for the past year 3. Compute the underallocaled or ovarallocaled manufacturing overhead. Haw S 23,000 will this urderallacaled or overallocaled manufacturing overhead be disposed of? 23,000 53,000 50,000 4. How can managers use accounting information to help control manufacturing overhead costs? to customers Depreciation on plant and equipment Indiroct manufacturing labor Customer service holine Plant ublities Direct labor cost 13,500 S 65,500 $ 41,500 $ 22,000 S 3,800 S 73,500 12,000 67,000 44,500 $ 23,000 $ 4,800 $ 85,500 Print Done Print Done Choose from any drop-down list and then click Check Answer

Answer 1

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Requirement -1
Budgeted Overheads	/	Estimated machine Hours	=	Predetermined Overhead Rate
$                                                160,800	/	6,700.00	=	$                                        24.00
Working for Estimated Overheads:
	Budgeted	Actual
Indirect Material	$               50,000	$                              53,000
Depreciation on Plant and Equip	$               65,500	$                              67,000
Indirect Manufacturing Labor	$               41,500	$                              44,500
Plant Utilities	$                 3,800	$                                4,800
Total	$             160,800	$                            169,300
Requirement -2
Predetermined Overhead Rate	$                      24
Actual Machine Hour	6600 Hours
Allocated Manufacturing Overheads	6600 Hours*$24	$                            158,400
Requirement -3
Actual Overheads	From Part -1	$                            169,300
Allocated Overheads	From Part -2	$                            158,400
Under allocated Overheads	169300-158400	$                              10,900
It will be disposed off Debiting Cost of Goods Sold.
Requirement -4
To control manufacturing overhead cost, Management can compare Actual overheads
with allocated overheads and Budgeted overheads.
Managers can then investigate large differences with reasons for increase from planned
or budgeted cost