Question

E2-18 (Algo) Calculating Actual and Applied Manufacturing Overhead Costs and Over-or Underapplied Overhead Costs [LO 2-3,2-4,2-5, 2-6) Verizon 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 $181,450. Estimated direct labor cost was $477,500 for 19,100 hours. Actual costs for the most recent month are summarized here: Item Description Total Cost Direct labor (1,910 hours) $ 47.751 Indirect costs Indirect labor 2,470 Indirect materials Factory rent 3,280 Factory supervision 4,760 Factory depreciation 5,780 Factory Janitorial work 1,130 Factory insurance 1,730 General and administrative salaries 4,240 Selling expenses 5,390 Required: 1. Calculate the predetermined overhead rate. 2. Calculate the amount of applied manufacturing overhead. 3. Calculate actual manufacturing overhead costs. 4. Compute over- or underapplied overhead. Complete this question by entering your answers in the tabs below. Required Required Required Required Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined Overhead Per DL Hour Rate Required 1 Required 2 >

Answer 1

1
Estimated manufacturing overhead	181450
Divide by Estimated Direct labor hours	19100
Predetermined overhead rate	9.50	per DL hour
2
Actual Direct labor hours	1910
X Predetermined overhead rate	9.50
Applied manufacturing overhead	18145
3
Indirect labor	2470
Indirect materials	3440
Factory rent	3280
Factory supervision	4760
Factory depreciation	5780
Factory janitorial work	1130
Factory insurance	1730
Actual manufacturing overhead costs	22590
4
Actual manufacturing overhead costs	22590
Less: Applied manufacturing overhead	18145
Overhead underapplied	4445