3.5-33 Question Help Hiltop Manufacturing uses a predetermined manufacturing ove
ID: 2331285 • Letter: 3
Question
3.5-33 Question Help Hiltop Manufacturing uses a predetermined manufacturing overhead rate based on machine hours to allocate manufacturing overhead to jobs. Selected data aboutth company's operations follows: Actual manufacturing overhead cost Estimated manufacturing overhead cost Estimated direct labor cost Estimated direct labor hours Actual direct labor hours Estimated machine hours Actual machine hours $500,000 $550,000 $175,800 50,500 60,700 40,600 35.800 By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent.) OA. $14,910 overallocated O B. $64,910 underallocated C. $14,910 underallocated D. S64.910 overallocatedExplanation / Answer
(1)
Estimated manufacturing overhead cost = $550,000
Estimated machine hours = 40,600
Estimated manufacturing overhead rate = Estimated manufacturing overhead cost/Estimated machine hours
= 550,000/40,600
= $13.55 per machine hour
Actual machine hours = 35,800
Manufacturing overhead allocated to job = Estimated manufacturing overhead rate x Actual machine hours
= 35,800 x 13.55
= $485,090
Actual manufacturing overhead cost = $500,000
Hence, manufacturing overhead under allocated = Actual manufacturing overhead cost - Manufacturing overhead allocated to job
= 500,000 - 485,090
= $14,910
Hence correct option is (c)
(2)
Estimated direct labor hours =200,900
Estimated manufacturing overhead cost = $920,000
Estimated manufacturing overhead rate = Estimated manufacturing overhead cost/Estimated direct labor hours
= 920,000/200,900
= $4.58 per direct labor hour
Actual manufacturing overhead cost = $970,500
Actual direct labor hours x Estimated manufacturing overhead rate = Allocated manufacturing overhead cost
Actual direct labor hours x 4.58 = 1,012,100
Hence, Actual direct labor hours = 1,012,100/4.58
= 220,983
Hence,correct option is (c)
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