The Alphonse Company allocates fixed overhead costs by machine hours and variabl
ID: 2346383 • Letter: T
Question
The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year te company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000 and the actual variable costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.How much overhead is allocated?
a. $1,500,000 b. $1,450,000 c. $1,400,000 d. $1,350,000
What is the over/underabsorbed overhead?
a. $2,000 b. $0 c. $5,000 d. $1,000
Explanation / Answer
The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year te company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000 and the actual variable costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.
How much overhead is allocated?
a. $1,500,000 b. $1,450,000 c. $1,400,000 d. $1,350,000
What is the over/underabsorbed overhead?
a. $2,000 b. $0 c. $5,000 d. $1,000
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