Application base was manufacturing overhead under

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Sinclair Company manufactures a line of lightweight running shoes. CEO Andrew Sinclair estimated that the company would incur $3,198,890 in manufacturing overhead during the coming year. Sinclair Company uses direct labor hours as its manufacturing overhead application base, predetermined overhead rate is $14.47/DLH and when it uses machine hours as its manufacturing overhead application base, predetermined overhead rate is $6.07/MH. Additionally, he estimated the company would operate at a level requiring 221,070 direct labor hours and 527,000 machine hours. At the end of the year, Sinclair Company had worked 210,000 direct labor hours, used 357,000 machine hours, and incurred $2,533,000 in manufacturing overhead.

1. If Sinclair Company used direct labor hours as its manufacturing overhead application base, how much overhead was applied to jobs during the year?

2. Using direct labor hours as the application base was manufacturing overhead under- or over applied for the year? By how much?

3. If Sinclair Company used machine hours as its manufacturing overhead application base, how much overhead was applied to jobs during the year?

4. Using machine hours as the application base, was manufacturing overhead under- or overapplied for the year? By how much?

Reference no: EM13751874

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