Carnaby tools is looking at various way of applying manufacturing overhead. You are given the information for last year
Estimates Actual
DM..........................................$500,000..................$500,000
DL............................................600,000....................785,000
MOH.........................................600,000....................800,000
DL HOURS.................................100,000...................130,000
MACHINE HOURS.......................200,000...................216,000
1) Compute the predetermined plant-wide overhead rates base on a) DL cost , b) DL hours, c) machine hours
2) Determined under or over apply MOH, in total, at the end of the year under each method: a) dl cost, b) dl hours, c) machine hours
3) Which of the measure( dl cost, dl hours, machine hours ) do you recommend? why?