Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Island Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $375,000 and budgeted machine-hours were 12,500. Actual factory overhead was $387,920 and actual machine-hours were 13,150.
A) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 375,000/12,500= $30 per machine hour
B) Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 30*13,150= $394,500
C) Over/under allocation= real MOH - allocated MOH
Over/under allocation= 387,920 - 394,500= 6,580 overallocated
