Answer:
Instructions are listed below
Explanation:
Giving the following information:
Baka Corporation applies manufacturing overhead based on direct labor-hours.
The company based its predetermined overhead rate on total estimated overhead of $243,300 and 8,300 estimated direct labor-hours.
Actual manufacturing overhead for the year amounted to $244,400 and actual direct labor-hours were 5,800.
To determine the over or under application of manufacturing overhead, first, we need to calculate the predetermined manufacturing overhead rate:
predetermined manufacturing overhead rate= total estimated manufacturing overhead for the period/ total amount of allocation base
predetermined manufacturing overhead rate= 243,000/8,300= 29.28
Now, we can calculate the allocated overhead:
Allocated manufacturing overhead= predetermined manufacturing overhead rate* actual hours= 29.28*5800= $169,824
Finally, we can determine the under or over allocation:
Under/over allocation= real manufacturing overhead - allocated manufacturing overhead= 244400 - 169824= $74,576 underallocated
