Question

Hello I have a cost accounting question.

Sylvan Company uses activity-based costing to determine product costs for external financial reports. Some of the entries have been completed to the manufacturing overhead account for the current year, as shown by entry (a) below:

Manufacturing Overhead
(a) 2,318,000

   
  

Required:
1.   What does entry (a) represent?
   
   
   Actual manufacturing overhead cost incurred
   Overhead applied
   Machine-hours

2.  
At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:

Activity Cost Pool   Activity Measure   Estimated
Overhead Cost   Expected
Activity
Labour related   Direct labour-hours   $   592,000      37,000   DLHs
Purchase orders   Number of orders      38,740      1,490   orders
Parts management   Number of part types      363,000      397   part types
Board etching   Number of boards      448,000      1,970   boards
General factory   Machine-hours      678,720      80,800   MHs

Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. (Round your final answers to 1 decimal place.)

  
3.   During the year, actual activity was recorded as follows:

Activity Cost Pool   Actual Activity
Labour related   40,000   DLHs
Purchase orders   1,280   orders
Parts management   419   part types
Board etching   2,130   boards
General factory   82,000   MHs

Determine the amount of manufacturing overhead cost applied to production for the year. (Round intermediate calculations to 1 decimal place and final answers to the nearest whole dollar amount.)

  
4.   Determine the amount of underapplied or overapplied overhead cost for the year. (Round intermediate calculations to 1 decimal place and final answers to the nearest whole dollar amount.)
      

Answer 1