Sylvan Company uses activity-based costing to determine product costs for external financial reports. Some of the entries have been completed to the manufacturing overhead account for the current year, as shown by entry (a) below:

Required:

1. What does entry (a) represent?

2. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:

Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools.

3. During the year, actual activity was recorded as follows:Activity Cost Pool ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Actual ActivityLabour related...........................................................41,000 DLHsPurchase orders........................................................1,300 ordersParts management...................................................420 part typesBoard etching............................................................2,150 boardsGeneral factory.........................................................82,000 MHs

Determine the amount of manufacturing overhead cost applied to production for the year.

4. Determine the amount of underapplied or overapplied overhead cost for the year.

Transcribed Image Text:

Manufacturing Overhead 2,402,000 (a) Activity Cost Pool Labour related Activity Measure Direct labour-hours Expected Activity 40,000 DLHS Estimated Overhead Cost $560,000 Purchase orders Number of orders 45,000 1,500 orders Parts management Number of part types 360,000 400 part types Board etching Number of boards 450,000 2,000 boards General factory Machine-hours 600,000 80,000 MHs