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Predetermined and applied overhead rates: Ganzalez Inc

Ganzalez, Inc., manufactures stereo speakers in two factories: one in Vandalia, Illinois and another in Modesto, California. The Vandalia factory uses DL$ 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:

Vandalia factory Modesto factory
Estimated manufacturing overhead.......... $1,000,000 $1,600,000
Estimated amount of allocation base........ (a)______________ 200,000 MHs
Predetermined overhead rate.................. $10 per DL$ (d)______________
Actual amount of allocation base.............. (b)______________ 190,000 MHs
Actual manufacturing overhead............... $1,092,500 $1,472,500
Applied manufacturing overhead.............. $1,010,000 (e)______________
Under or overapplied overhead............... (c)______________ (f)_______________

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Solution Summary

Your tutorial with the process diagrammed and the missing cells computed (click in cells to see calculation) is attached in Excel.

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