Under applied and over applied: Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department. If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied. At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied. Whether manufacturing overhead cost is over applied or under applied.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased

Conclusion

Above calculations stated manufacturing overhead has over applied.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

General accounting

Hii expert please given correct answer general Accounting question

On 1st May, 2024 you are engaged to audit the financial statement of Giant Pharmacy for the period ending 30th December 2023. The Pharmacy is located at Mgeni Nani at the outskirts of Mtoni Kijichi in Dar es Salaam City. Materiality is judged to be TZS. 200,000/=. During the audit you found that all tests produced clean results. As a matter of procedures you drafted an audit report with an unmodified opinion to be signed by the engagement partner. The audit partner reviewed your file in October, 2024 and concluded that your audit complied with all requirements of the international standards on auditing and that; sufficient appropriate audit evidence was in the file to support a clean audit opinion. Subsequently, an audit report with an unmodified opinion was issued on 1st November, 2024. On 18th January 2025, you receive a letter from Dr. Fatma Shemweta, the Executive Director of the pharmacy informing you that their cashier who has just absconded has been arrested in Kigoma with TZS.…

Answer 2

Question

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased

Conclusion

Above calculations stated manufacturing overhead has over applied.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased

Conclusion

Above calculations stated manufacturing overhead has over applied.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased

Conclusion

Above calculations stated manufacturing overhead has over applied.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased

Conclusion

Above calculations stated manufacturing overhead has over applied.

Answer 6

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased

Conclusion

Above calculations stated manufacturing overhead has over applied.

Answer 7

Chapter 3, Problem 1AE

To determine

Under applied and over applied:

Company would estimate the manufacturing overhead cost to allot the estimate amount to the manufacturing department.

If actual manufacturing overhead cost is exceeded the estimated applied cost is called as under applied.

At the same time, actual manufacturing overhead cost is lower than the estimated applied cost is called as over applied.

Whether manufacturing overhead cost is over applied or under applied.

Answer 8

Expert Solution & Answer

Answer to Problem 1AE

Solution:

Particulars	Amount
Estimated manufacturing overhead cost	$300,000
Estimated total amount of the allocation base	60,000	Machine hours
Predetermined over head rate	$5	Per machine hour

Computation of under applied or over applied of
Manufacturing overhead cost

Particulars
Actual manufacturing overhead cost	$290,000
Manufacturing overhead cost applied to work:
Predetermined over head rate	$5	Per machine hour
Actual total amount of allocation base	68,000	Machine hours
Manufacturing over head applied	$340,000
(Over applied) manufacturing overhead cost	($50,000)

Formula:

Predetermined over rate = Estimated manufacturing overhead cost / Estimated total amount of the allocation base. Over applied formula = Actual manufacturing over head is less than estimated manufacturing over head applied.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Explanations:

$300,000/ 60,000=$5 per machine hour Actual manufacturing over head Predetermined over rate =$290,000 Estimated manufacturing over head applied =68000 machines hours*$5 per machine hour =$340,000$290,000 − $340,000 = −$50,000 Company has over applied the manufacturing overhead because actual overhead is less than estimated applied, it resulted to over applied by $50,000.

Yes, estimated manufacturing overhead applied has changed due to estimated allocation base decreased it lead predetermined rate to increased by $1 that lead to over applied the manufacturing over head.

Old predetermined rate is $300,000 / 75,000=$4: New predetermined rate is $300,000/ 60000=$5=$1 increased