Chapter 3: Applying Excel Data Allocation base Machine-hours Estimated manufacturing overhead cost $416,000 Estimated total amount of the allocation base 64,000 machine-hours Actual manufacturing overhead cost $403,800 Actual total amount of the allocation base 69,000 machine-hours If your formulas are correct, you should get the correct answers to the following questions. (a) What is the Predetermined overhead rate? (Round your answer to 2 decimal places.) (b) By how much is the manufacturing overhead underapplied or overapplied? Change the estimated total amount of the allocation base to 65,000 machine-hours, but keep everything the same as in Requirement 2. The data area of your worksheet should now look like this: 1 2 3 4 5 6 7 8 Chapter 3: Applying Excel Data Allocation base Machine-hours Estimated manufacturing overhead cost $416,000 Estimated total amount of the allocation base 65,000 machine-hours Actual manufacturing overhead cost $403,800 Actual total amount of the allocation base 69,000 machine-hours (a) By how much is the manufacturing overhead underapplied or overapplied? (b) Why is the amount of underapplied (overapplied) manufacturing overhead different from Requirement 2 above?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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If your formulas are correct, you should get the correct answers to the following questions.
(a) What is the Predetermined overhead rate? (Round your answer to 2 decimal places.)
(b) By how much is the manufacturing overhead underapplied or overapplied?
Change the estimated total amount of the allocation base to 65,000 machine-hours, but keep everything the same as in Requirement 2. The data area of your worksheet should now look like this:
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(a) By how much is the manufacturing overhead underapplied or overapplied?
(b) Why is the amount of underapplied (overapplied) manufacturing overhead different from Requirement 2 above?
check all that apply 1
- 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.unanswered
| Chapter 3: Applying Excel | ||
| Data | ||
| Allocation base | Machine-hours | |
| Estimated manufacturing overhead cost | $416,000 | |
| Estimated total amount of the allocation base | 64,000 | machine-hours |
| Actual manufacturing overhead cost | $405,000 | |
| Actual total amount of the allocation base | 69,000 | machine-hours |
(a) By how much is the manufacturing overhead underapplied or overapplied?
(b) Why is the amount of underapplied (overapplied) manufacturing overhead different from Requirement 2 above?
check all that apply 2
- The predetermined overhead rate changed.unanswered
- The change in the actual manufacturing overhead cost directly resulted in a comparable change in the amount of underapplied (overapplied) manufacturing overhead.unanswered
- The change in the estimated total amount of the allocation base affected the amount of manufacturing overhead applied.
| Data | ||
| Allocation base | Machine-hours | |
| Estimated manufacturing overhead cost | $416,000 | |
| Estimated total amount of the allocation base | 65,000 | machine-hours |
| Actual manufacturing overhead cost | $403,800 | |
| 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 | $4.00 | per machine-hour |
| Computation of underapplied or overapplied manufacturing overhead | ||
| Actual manufacturing overhead cost | $ 290,000 | |
| Manufacturing overhead cost applied to Work in Process during the year: | ||
| Predetermined overhead rate | $4.00 | per machine-hour |
| Actual total amount of the allocation base | 68,000 | machine-hours |
| Manufacturing overhead applied | 272000 | |
| Underapplied (overapplied) manufacturing overhead | $ 18,000 |
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