Good Doggy Bowtique is a famous Canadian company that produces handmade, durable and unique pet accessories. Each item is created with unique and on-
trend fabrics, and then tested to ensure durability for the most active pets. During 2020,
the company estimated that the manufacturing overhead costs for the year will be
$475,800. The company showed that the actual overhead costs for 2020 to be $493,200.
Activity base information for 2020 is presented in the table below:
Activity Base:
Direct Labour Cost Direct Labour Hours Machine Hours
Estimated
$344,780
27,500
34,600
Actual
$362,940
29,150
35,930
Instructions
(a) Compute the predetermined overhead rate for each activity base. (1.5 marks)
(b) Compute the amount of overhead applied in 2020 for each activity base. (1.5 marks)
(c) Compute the amount of under- or overapplied overhead for 2020 for each activity
base. (3 marks)