Answer:
Under-allocation of manufacturing overhead is $15,024.63
Explanation:
Actual manufacturing overhead cost $500,000
Estimated manufacturing overhead cost $550,000
Estimated direct labor cost $175,800
Estimated direct labor hours 50,500
Actual direct labor hours 60,700
Estimated machine hours 40,600
Actual machine hours 35,800
Predetermined Rate of Allocation = Estimated manufacturing overhead cost / Estimated machine hours
Predetermined Rate of Allocation = $550,000 / 40600
Predetermined Rate of Allocation = $13.54679803 / hour
Allocated Manufacturing overheads = Predetermined overhead rate x Actual Machine hours
Allocated Manufacturing overheads = $13.54679803 x 35,800
Allocated Manufacturing overheads = $484,975.37
Under / over allocation of manufacturing overhead = Actual manufacturing overhead - Allocated manufacturing overhead
Under / over allocation of manufacturing overhead = 500,000 - $484,975.37
Under-allocation of manufacturing overhead = $15,024.63
