Apollo Manufacturing produces a basic cellphone as a contract manufacturer. Over
ID: 2419577 • Letter: A
Question
Apollo Manufacturing produces a basic cellphone as a contract manufacturer. Overhead is applied at a rate of $42 per direct labor hour. The direct labor rate is $18 per hour. In March, there was no beginning or ending work in process, and the assembly department produced 20,000 finished phones. The materials cost was $120,000, and there were 2,500 direct labor hours worked during the month. Actual overhead spending was $103,400 during the month.
Calculate the total cost of production in the month of March and the cost per unit for each phone produced. Determine if overhead was over applied or under applied and by what amount.
Explanation / Answer
Total cost of prodcuction
Materials cost $120,000
Add;Direct labor (2,500*18) 45,000
Manufacturing overhead(2,500*42) 105,000
Total cost $270,000
c) Actual overhead spending $103,400
Applied 105,000
Overhead over applied $1,600
Total cost of prodcuction
Materials cost $120,000
Add;Direct labor (2,500*18) 45,000
Manufacturing overhead(2,500*42) 105,000
Total cost $270,000
b) Unit cost = $270,000/20,000 = $13.50 per unitc) Actual overhead spending $103,400
Applied 105,000
Overhead over applied $1,600
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