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2. (6 points) Gonzalez, Inc. manufactures stereo speakers in two factories; one Vandalia, Illinois and another in Merced, California. The Vandalia factory uses direct labor hours (DLHs) for its overhead rate and the Modesto factory uses machine-hours (MHs) for its overhead rate. Information related to both plants for last year is presented below: Modesto factory $2,580,000 150,000 MHs Vandalia factory Estimated manufacturing overhead. Predetermined overhead rate Actual amount of allocation base Actual manufacturing overhead. Applied manufacturing overhead.. Under or overapplied overhead (indicate S4,025,000 $35 per DLH (d) $4,100,000 $4,200,000(e) 145,000 MHs $2,600,000 the dollar amount and whether it is over or underapplied Required: Fill in the lettered blanks above. SHOW YOUR CALCULATIONS BELOW (For partial credit)!
Expert Answer
| Vandalia | Modesto | |||
| a) | Estimated overhead | 4025000 | 2580000 | |
| b) | Estimated allocation base | 115000 | 150000 | |
| c) = a/b | Predetermined overhead rate | 35 | 17.2 | |
| d) | Actual overheads | 4100000 | 2600000 | |
| e) | Predetermined overhead rate | 35 | 17.2 | |
| f) = h/e | Actual allocation base = Applied overheads/Predetermined overhead rate | 120000 | 145000 | |
| g) | Actual overheads | 4100000 | 2600000 | |
| h) = e*f | Applied overheads | 4200000 | 2494000 | |
| Applies overheads < Actual overheads | Underapplied | |||
| Actual overheads < Applied overheads | Overapplied |
