Question

3. Either print or make a copy of your worksheet in your workbook before proceeding. You will need to refer back to this worksheet. Change the estimated total amount of the allocation base to 45,000 machine-hours, but keep everything the same as in Requirement 2. The data area of your worksheet should now look like this: 1 Chapter 3: Applying Excel 3 Data 4 5 6 7 8 Allocation base Estimated manufacturing overhead cost Estimated total amount of the allocation base Actual manufacturing overhead cost Actual total amount of the allocation base Machine-hours $ 175,500 45,000 machine-hours $ 184,800 35,000 machine-hours (a) By how much is the manufacturing overhead underapplied or overapplied? manufacturing overhead (b) Why is the amount of underapplied (overapplied) manufacturing overhead different from Requirement 2 above? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answers and double click the box with the question mark to empty the box for a wrong answers. Any boxes left with a question mark will be automatically graded as incorrect.) 2 The change in the estimated total amount of the allocation base affected the predetermined overhead rate. 2 The change in the estimated total amount of the allocation base affected the amount of manufacturing overhead applied. Actual manufacturing overhead cost differs from period to period. The estimated manufacturing overhead cost did not change in proportion to the change in the estimated total amount of the 2

Answer 1

Answer a

Under applied manufacturing Overheads

$ 48,300

Calculations:

	Amount	Calculations
Predetermined Overhead rate	$         3.90	175,500/45,000
Overheads recovered	$ 136,500	3.9*35,000
Under applied manufacturing Overheads	$     48,300	$ 184,800 - $ 136,500

Answer b

The correct option is the first one i.e. The change in the estimated total amount of allocation base affected the predetermined overhead rate.

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