Hi, I have some problems with these question

Cutting department

Budgeted manufacturing overhead $ 60 000

Actual manufacturing overhead 54 000

Budgeted machine hours 24 000

Actual machine hours 27 000

Budgeted direct labour hours 30 000

Actual direct labour hours 29 400

Welding department

Budgeted manufacturing overhead $120 000

Actual manufacturing overhead 108 000

Budgeted machine hours 96 000

Actual machine hours 90 000

Budgeted direct labour hours 15 000

Actual direct labour hours 11 700

Total plant

Budgeted manufacturing overhead $180 000

Actual manufacturing overhead 162 000

Budgeted machine hours 120 000

Actual machine hours 117 000

Budgeted direct labour hours 45 000

Actual direct labour hours 41 100

One of Noteperfect's major products, the A Frame, has the following production requirements

Cutting department

Machine hours 2.5

Direct labour hours 4.0

Welding department

Machine hours 4.0

Direct labour hours 1.0

Total plant

Machine hours 6.5

Direct labour hours 5.0

1/ Calculate the manufacturing overhead cost of the A Frame using:

• (a) a predetermined plantwide rate based on direct labour hours
• (b) a predetermined plantwide rate based on machine hours
• (c) predetermined departmental rates based on direct labour hours for the cutting department and on machine hours for the welding department.

Which of these three estimates of overhead cost is likely to be the most accurate? Explain.

2/ Calculate the manufacturing overhead cost of the A Frame, using an actual costing system and departmental overhead rates based on labour hours for cutting and on machine hours for welding. Explain why cost drivers must be used with actual costing as well as with normal costing.

3/ Which estimate of overhead costs is likely to be more accuratethat based on predetermined departmental rates or that based on actual departmental rates?