2. (6 points) Gonzalez, Inc. manufactures stereo speakers in two factories; one
ID: 2332430 • Letter: 2
Question
2. (6 points) Gonzalez, Inc. manufactures stereo speakers in two factories; one in Vandalia, Illinois and another in Merced, California. The Vandalia factory uses direct labor hours (DLHs) for its overhead rate and the Modesto factory uses machine-hours (MHs) for its overhead rate. Information related to both plants for last vear is presented below: Vandalia factoryModesto factory Estimated manufacturing overhead... $4,025,000 $35 per DLH $4,100,000 S2,580,000 150,000 MHs (d) 145,000 MHs S2,600,000 Actual manufacturing overhead.... $4,200,000(e) Under or overapplied overhead (indicate the dollar amount and whether it is Required Fill in the lettered blanks above. SHOW YOUR CALCULATIONS BELOW (For partial credit)!Explanation / Answer
Vandalia Factory
Modesto factory
estimated manufacturing overhead
4025000
2580000
estimated amount of allocation base
4025000/35
115000
150000
predetermined overhead rate per DLH and MHS
2580000/145000
35
2580000/150000
17.2
Actual amount of allocation base
4200000/35
120000
145000
actual manufacturing overhead
4100000
2600000
applied manufacturing overhead
4200000
145000*17.2
2494000
under or over applied overhead
Under applied
Over applied
Vandalia Factory
Modesto factory
estimated manufacturing overhead
4025000
2580000
estimated amount of allocation base
4025000/35
115000
150000
predetermined overhead rate per DLH and MHS
2580000/145000
35
2580000/150000
17.2
Actual amount of allocation base
4200000/35
120000
145000
actual manufacturing overhead
4100000
2600000
applied manufacturing overhead
4200000
145000*17.2
2494000
under or over applied overhead
Under applied
Over applied
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