The company you work for uses machine hours as an allocation base to allocate overhead to jobs. You also collect the following information:
Estimated use				47,500	m-h
Practical capacity				50,000	m-h
Actual usage				46,850	m-h
Fixed manufacturing overhead*				$           1,258,400
*All manufacturing overhead is fixed
Machine hours required for  Job X				55	m-h
1) Using estimated amount of the allocation base, calculate:
a) predetermined overhead rate
b) overhead would be applied to Job X
c) underapplied or overapplied overhead
2) Using practical capacity amount of the allocation base, calculate:
a) predetermined overhead rate
b) overhead would be applied to  Job X
c) underapplied or overapplied overhead
3) Explain why underapplied/overapplied overhead is different under the two methods.

Answer rating: 100% (QA)

Lets calculate each part step by step 1 Using estimated amount of the allocation base a Predetermined overhead rate POR is calculated as POR Estimated ... View the full answer