Required: 1. Based on the company's current allocation base (direct labor hours), compute the following: a. Predetermined overhead rate. b. Applied manufacturing overhead. c. Over- or underapplied manufacturing overhead. company had used direct labor dollars (instead of direct labor hours) as its allocation base, compute the following: a. Predetermined overhead rate. b. Applied manufacturing overhead. c. Over- or underapplied manufacturing overhead. 3. If the company had used machine hours (instead of direct lah compute the following: a. Predetermined overhead rate. b. Applied manufacturing overhead. c. Over- or underapplied manufacturing overhead. 4. Based on last year's data alone, which allocation base woul measure for applying manufacturing overhead costs to produc 5. How does a company decide on an allocation base to use it What factors should be considered? ne hours (instead of direct labor hours) as its allocation base, ded the most accurate ase to use in applying manufacturing overhead Monufacturing Costs. Preparing a fost manufacturing over- cturing overhead to base such as direct Job Order Costing 3, 2-5 PA2-7 Selecting an Al Selecting an Allocation Base and Analyzing Manufacturing Overhead direct labor hours, head to jobs. The company has alwa products, but it is trying to decide labor dollars or machine hours. umberjack Company is trying to decide on an allocation base to use to assign manufacturing The company has always used direct labor hours to assign manufacturing over at is trying to decide whether it should use a different allocation base such and machine hours for the most recent fiscal year are summa ual and estimated data for manufacturing overhead, direct labor cost, direct labor bo st recent fiscal year are summarized here: Actual Value Estimated Value $594,000 Manufacturing overhead cost Direct labor cost Direct labor hours Machine hours $396,000 16,500 hours 7,500 hours $655,000 $450,000 18,000 hours 8,500 hours