Walton Company and Zachary Company assign manufacturing overhead to Work in Process Inventory using direct labor cost. The following information is available for the companies for the year: Walton Company Zachary Company Actual direct labor cost$149,000 $174,000 Estimated direct labor cost 154,000 100,000 Actual manufacturing overhead cost 54,700 90,100 Estimated manufacturing overhead cost 70,840 87,000 Required Compute the predetermined overhead rate for each company. Determine the amount of overhead cost that would be applied to Work in Process Inventory for each company. Compute the amount of overapplied or underapplied manufacturing overhead cost for each company.

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.