Info in images 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 82,000 machine-hours, but keep everything the same as in Requirement2. The data area of your worksheet should now look like this:AВC1Chapter 3: Applying Excel23Data4Allocation baseMachine-hoursEstimated manufacturing overhead cost2$713,400Estimated total amount of the allocation base82,000 machine-hours7Actual manufacturing overhead cost$695,9008Actual total amount of the allocation base86,000 machine-hours(a) By how much is the manufacturing overhead underapplied or overapplied?Overappliedmanufacturing overhead$52,300 (b) Why is the amount of underapplied (overapplied) manufacturing overhead different from Requirement 2 above? (You may selectmore than one answer. Single click the box with the question mark to produce a check mark for a correct answers and doubleclick the box with the question mark to empty the box for a wrong answers. Any boxes left with a question mark will beautomatically graded as incorrect.)? The change in the estimated total amount of the allocation base affected the predetermined overhead rate.? 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 allocationbase.

Answered: (b) Why is the amount of underapplied…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Info in images

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 82,000 machine-hours, but keep everything the same as in Requirement
2. The data area of your worksheet should now look like this:
A
В
C
1
Chapter 3: Applying Excel
2
3
Data
4
Allocation base
Machine-hours
Estimated manufacturing overhead cost
2$
713,400
Estimated total amount of the allocation base
82,000 machine-hours
7
Actual manufacturing overhead cost
$
695,900
8
Actual total amount of the allocation base
86,000 machine-hours
(a) By how much is the manufacturing overhead underapplied or overapplied?
Overapplied
manufacturing overhead
$
52,300

(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.)
? The change in the estimated total amount of the allocation base affected the predetermined overhead rate.
? 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 allocation
base.

Expert Solution

Step 1

Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products. These costs are not directly related to the units manufactured. So they are allocated to the manufactured units based on estimated cost drivers.

Pre-determined overhead allocate rate: It the rate of allocating the expected overheads to the actual units or hours for a specific accounting period.

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