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Chapter_3 - Exercise33(10minutes (DLHs = $586,000 40,000...

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Exercise 3-3  (10 minutes) The predetermined overhead rate is computed as follows: Estimated total manufacturing overhead ....... $586,000 ÷  Estimated total direct labor hours (DLHs)...       40,000     DLHs = Predetermined overhead rate .....................       $14.65     per DLH Exercise 3-11  (10 minutes) 1. Actual direct labor-hours ................................. 8,250 ×  Predetermined overhead rate ......................       $21.40     = Manufacturing overhead applied ................. $176,550 Deduct: Manufacturing overhead incurred .....   172,500     Manufacturing overhead overapplied ............. $          4,050     2. Because manufacturing overhead is overapplied, the cost of goods sold  would decrease by $4,050 and the gross margin would increase by  $4,050.
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Problem 3-25  (60 minutes) 1. a.  Estimated total manufacturing overhead cost Predetermined = overhead rate Estimated total amount of the allocation base $1,440,000 = = 160% of direct labor cost $900,000 direct labor cost b. $21,200  ×  160% = $33,920.
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