Directions: Your assignment this week is to answer the three questions below. Pl

Question

Directions: Your assignment this week is to answer the three questions below. Please note that Question #3 has 2 parts, Part A and Part B. Please show your work for full credit and use the box provided. Please add more rows or columns to the box if needed. 1. Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. During the year, the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labor hours were worked. The company estimated that it would incur $525,000 of manufacturing overhead during the year and that 150,000 direct labor hours would be worked. By how much was manufacturing overhead overallocated or underallocated for the year?

Explanation / Answer

           3.50

Actual is more than standard that means manufacturing overhead were underallocated for the year.

Actual Standard Manufaturing overhead cost       582,000       525,000 Labor hours       135,000       150,000 per hour labor cost            4.31

           3.50

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