Hartley uniforms produces uniforms The company allocates man

Hartley uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses.

Hartley UniformsHartley Uniforms

reports the following cost data for the past year:

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.

Requirement 1. Compute the predetermined manufacturing overhead rate.

Enter the formula for predetermined manufacturing overhead rate, then compute the rate.

Estimated yearly overhead costs

/

Estimated yearly machine hours

=

Predetermined overhead rate

$194,400

/

7,200

=

$27

per machine hour

Requirement 2. Calculate the allocated manufacturing overhead for the past year.

Manufacturing

x

=

overhead allocated

x

=

Choose from any list or enter any number in the input fields and then click Check Answer.

3

parts remaining

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Check Answer

Data Table

Budget

Actual

Direct labor hours. . . . . . . . . . . . . . . . . . . . . . . .

7,600

hours

6,100

hours

Machine hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,200

hours

6,300

hours

Depreciation on salespeople\'s autos. . . . . . . . . . . .

$23,000

$23,000

Indirect materials. . . . . . . . . . . . . . . . . . . . . . . .

$48,500

$50,500

Depreciation on trucks used to deliver uniforms

to customers. . . . . . . . . . . . . . . . . . . . . . . . . .

$13,000

$11,000

Depreciation on plant and equipment. . . . . . . . . .

$70,000

$72,500

Indirect manufacturing labor. . . . . . . . . . . . . . . . .

$40,000

$42,000

Customer service hotline. . . . . . . . . . . . . . . . . . . . . .

$19,000

$21,000

Plant utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$35,900

$38,400

Direct labor cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$72,500

$85,500

PrintDone

Requirements

1.

Compute the predetermined manufacturing overhead rate.

2.

Calculate the allocated manufacturing overhead for the past year.

3.

Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposedof?

4.

How can managers use accounting information to help control manufacturing overhead costs?

Estimated yearly overhead costs

/

Estimated yearly machine hours

=

Predetermined overhead rate

Solution

2. Allocated overhead :

Manufacturing

Actual hours

x

Predetermine overhead rate

=

overhead allocated

6300

x

27

=

170100

						Manufacturing
	Actual hours	x	Predetermine overhead rate		=	overhead allocated
	6300	x	27		=	170100