Question: Babcox Manufacturing uses a predetermined manufacturing overhead rate based on machine hours to allocate manufacturing overhead to jobs. Selected data about the companys operations follows:
Babcox Manufacturing uses a predetermined manufacturing overhead rate based on machine hours to allocate manufacturing overhead to jobs. Selected data about the companys operations follows:
| Actual manufacturing overhead cost | $430,000 |
| Estimated manufacturing overhead cost | $400,000 |
| Estimated direct labor cost | $180,000 |
| Estimated direct labor hours | 60,000 |
| Actual direct labor hours | 55,000 |
| Estimated machine hours | 80,000 |
| Actual machine hours | 84,000 |
Can you please explain?
Is it
10,000 overallocated?
10,000 underallocated?
20,000 overallocated?
20,000 underallocated?
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