Question

The management of Bagger Corporation would like to investigate the possibility of basing its predetermined overhead...

The management of Bagger Corporation would like to investigate the possibility of basing
its predetermined overhead rate on activity at capacity. The company controller has provided
an example to illustrate how this new system would work. In this example, the allocation base
is machine-hours and the estimated amount of the allocation base for the upcoming year is
81,000 machine-hours. In addition, capacity is 95,000 machine-hours and the actual level of
activity for the year is 84,900 machine-hours. All of the manufacturing overhead is fixed and
is P 6,617,700 per year. For simplicity, it is assumed that this is the estimated manufacturing
overhead for the year as well as the manufacturing overhead at capacity. It is further assumed
that this is also the actual amount of manufacturing overhead for the year. If the company bases
its predetermined overhead rate on capacity, by how much was manufacturing overhead
underapplied or overapplied?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The management of Bullinger Corporation would like to investigate the possibility of basing its predetermined overhead...
The management of Bullinger Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 20,000 machine-hours. Capacity is 23,000 machine-hours and the actual level of activity for the year is assumed to be 18,700 machine-hours. All of...
The management of Plitt Corporation would like to investigate the possibility of basing its predetermined overhead...
The management of Plitt Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 69,000 machine-hours. Capacity is 82,000 machine-hours and the actual level of activity for the year is assumed to be 72,400 machine-hours. All of...
3.) The management of Grainger Corporation would like to investigate the possibility of basing its predetermined...
3.) The management of Grainger Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. Using the capacity level of activity as the base normally results in underapplied overhead. This amount could then be used to approximate the cost of idle resources (sometimes referred to as excess capacity). Of course, in order to comply with GAAP, the balance in the manufacturing overhead...
1. Mausser Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which...
1. Mausser Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which its predetermined overhead rate is based on capacity. The capacity of the factory is determined by the capacity of its constraint, which is an automated jointer. Additional information is provided below for the most recent month: Estimates at the beginning of the month: Estimated total fixed manufacturing overhead $ 24,480 Capacity of the jointer 450 hours Actual results: Sales $ 74,700 Direct materials $...
Job Order Costing Data Allocation base Machine-hours Estimated manufacturing overhead cost $300,000 Estimated total amount of...
Job Order Costing Data Allocation base Machine-hours Estimated manufacturing overhead cost $300,000 Estimated total amount of the allocation base 75,000 machine-hours Actual manufacturing overhead cost $290,000 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 ? Estimated total amount of the allocation base ? machine-hours Predetermined overhead rate ? per machine-hour Computation of underapplied or overapplied manufacturing...
At the beginning of the current year, Garber Corporation estimated that its manufacturing overhead would be...
At the beginning of the current year, Garber Corporation estimated that its manufacturing overhead would be $576,000 and the activity level would be 28,000 machine-hours. The level of activity at capacity is 40,000 machine-hours. The actual manufacturing overhead for the year was $503,700 and the actual level of activity was 28,100 machine-hours.     123. Assume for the purposes of this question only that the actual manufacturing overhead for the year was $551,000 and was entirely fixed. If the company bases...
Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for...
Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 35,900 Estimated variable manufacturing overhead $ 6.73 per machine-hour Estimated total fixed manufacturing overhead $ 801,288 Actual machine-hours for the year 33,300 The predetermined overhead rate for the recently completed year was closest to:
Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year,...
Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,800 hours and the total estimated manufacturing overhead was $497,040. At the end of the year, actual direct labor-hours for the year were 21,500 hours and the actual manufacturing overhead for the year was $492,040. Overhead at the end of the year was: $1,840 underapplied $6,840 overapplied $6,840 underapplied $1,840 overapplied
Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on...
Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours      30,500 Total fixed manufacturing overhead cost   $   610,000 Variable manufacturing overhead per machine-hour   $   6.00 Recently, Job T687 was completed with the following characteristics: Number of units in the job      10 Total machine-hours      30 Direct materials   $   690 Direct labor cost   $   1,370...
Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data...
Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 43,000 Estimated variable manufacturing overhead $ 6.92 per machine-hour Estimated total fixed manufacturing overhead $ 1,090,050 Actual machine-hours for the year 40,900 The predetermined overhead rate for the recently completed year was closest to: Multiple Choice $31.93 per machine-hour $32.27 per machine-hour $6.92 per machine-hour $25.35...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT