Highlighted is wrong. Verizox Company uses a job order cost system with manufact

Question

Highlighted is wrong.

Verizox Company uses a job order cost system with manufacturing overhead applied to products based on direct labor hours. At the beginning of the most recent year, the company estimated its manufacturing overhead cost at $186,850. Estimated direct labor cost was $442,150 for 18,500 hours Actual costs for the most recent month are summarized here Item Description Direct labor (1,850 hours) Indirect costs Total Cost $44,216 Indirect labor Indirect materials Factory rent Factory supervision Factory depreciation Factory janitorial work Factory insurance General and administrative salaries Selling expense 2,530 3,420 3,400 4,790 5,750 1,270 1,820 4,260 5,490 Required 1. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined Overhead Rate $ 10.101 Per DL Hour 2. Calculate the amount of applied manufacturing overhead plied Manufacturing Overhead 18,685 3. Calculate actual manufacturing overhead costs tual Manufacturing Overhead Costs $ 22,280 4. Compute over- or underapplied overhead. (Input the amount as positive value.) OverheadUnderapplied by $ 3,595

Explanation / Answer

1. Predetermine overhead rate :

Predetermine overhead rate = 186850/18500 = 10.10 per DLH

2. Applied manufacturing overhead = 10.10*1850 = 18685

3. Actual manufacturing overhead :

4. Compute over or under applied overhead :

Over (under) Applied overhead = Applied overhead-actual overhead

= 18685-22980

Under applied overhead = 4295

Indirect labour 2530 Indirect material 3420 Factory rent 3400 Factory supervision 4790 Factory depreciation 5750 Factory Janitorial work 1270 Factory insurance 1820 Actual manufacturing overhead cost 22980

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