2.00 points E2-16 Calculating Actual and Applied Manufacturing Overhead Costs an
ID: 2332575 • Letter: 2
Question
2.00 points E2-16 Calculating Actual and Applied Manufacturing Overhead Costs and Over- or Underapplied Overhead Costs [LO 2-3, 2-4, 2-5, 2-6] Verlzox Compery uses a job order cost system with manufacouring overhead applied to products based on direct labor hours. At the beginning of the most recent yeer, the company estimated its manufacturing overmeed cost at $179,550. Estmated direct labor cost was $446,040 for 8,800 haurs Actual costs for the most recent month are surmmarized here ham Description Direct laber 11,880 Fours Indrect costs Tobal Cost 544,605 irect labor Indirect matenals Factery rent Factery supervisian Factery depreciatior Factery jantorial work Fectcry insurance General and adminstred e selaries Seling expeses 2.480 3,450 3,340 4,830 5,790 1,250 5,390 Required: 1. Caloulate the predelerrined ovemead rate. (Round your answer to 2 decimal places.) 2. Calaulate the amount of appled manufacturing overhead 3. Caloulate actual manufacturing ovemead costs. 4. Campute over-or underapaliad ovamaad. (Input the amount as positive value)Explanation / Answer
Answer
A
Estimated Manufacturing Overhead cost
$ 179,550.00
B
Allocation base-Estimated no. of direct labor hours
18,900
C = A/B
Predetermined Overhead rate
$ 9.50
A
No. of actual direct labor hours for month
1,880
B
Predetermined Overhead rate
$ 9.50
C = A x B
Applied Manufacturing Overhead
$ 17,860.00
Manufacturing Overheads are those cost that are indirect to production process but relate to factory.
Indirect Labor
$ 2,460.00
Indirect material
$ 3,450.00
Factory Rent
$ 3,340.00
Factory Supervision
$ 4,830.00
Factory Depreciation
$ 5,790.00
Factory Janitorial Work
$ 1,250.00
Factory Insurance
$ 1,750.00
Actual Manufacturing Overhead costs
$ 22,870.00
A
Applied Manufacturing Overhead
$ 17,860.00
B
Actual Manufacturing Overhead costs
$ 22,870.00
C = B - A
Under applied
$ 5,010.00
---Since Applied overheads are LESS than Actual Overhead, the Overheads are UNDER-APPLIED by $ 5,010
A
Estimated Manufacturing Overhead cost
$ 179,550.00
B
Allocation base-Estimated no. of direct labor hours
18,900
C = A/B
Predetermined Overhead rate
$ 9.50
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