4. Change the estimated total amount of the allocation base back to 87,000 machi

Question

4. Change the estimated total amount of the allocation base back to 87,000 machine-hours, so that the data area of you worksheet looks exact?y the same as in Requirement 2. Now change the actual manufacturing overhead cost from $784,300 to $789,800. The data area of your worksheet should now look like this: Chapter 2: Applying Excel 3 Data 4 Allocation base 5 Estmated manutacturing overhead cost 5 Eetimated total amount ot the allocation base 5800,400 7000machine- 89.600 D0machine- houre Actual manufacturing overhead C0et 3 Actual total amount of the alocation base (a) By how much is the manufacturing overhead underapplied or overapplied? Underapplied

Explanation / Answer

Estimated overhead rate= estimated manufacturing overhead/estimated machine hours= 800400/87000=$9.20

Actual manufacturing overhead= overhead rate* actual machine hours= 9.20*80000=$736000

Underapplied overhead= 789600-736000= $53600

So underapplied manufacturing overhead is $53600

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