Franklin Inc manufachures pipes and applies manufacturing overhead costs to prod

Question

Franklin Inc manufachures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $16 per direct labor-hour Th Drect materials Direct labor (4,500 hours @$11hour) $110.000 49. 500 12,000 26,000 22,000 0.000 37.000 Indirect labor Plant tacility rent Depreciation on plant machinery and equipment Sales commissions Administrative expenses For June 2018, manufacturing overhead s A. underalocated by S25000 B. urderalocated by $12,000 OC overallocated by $12.000 OD. overalocated by $25,000 cack to select your answer

Explanation / Answer

Actual overhead = (indirect labour+plant factory rent+dep on plant machine and equipment)

= (12000+26000+22000)

Actual overhead = 60000

Applied overhead = 4500*16 = 72000

Overapplied overhead = 60000-72000 = 12000

so answer is c) Overallocated by $12000

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