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A firm uses direct labour-hours to apply overhead to products. Overhead was under-applied for the year...

A firm uses direct labour-hours to apply overhead to products. Overhead was under-applied for the year by $36899. The actual manufacturing overhead for the year was $111493. The budgeted manufacturing overhead was $138421 and budgeted labour-hours were 6779. Direct labour is paid at the rate of $21 per hour. What was the total direct labour cost for the year?

Select one:

a. $76716

b. $114665

c. $152614

d. $142359

Lager Ltd.’s production volume and per unit information for the year is given below:

Per unit information:

Direct labour

$14

Direct material

11

Applied manufacturing overhead

7

Unit production (budget)

28720

Unit production (actual)

21516

For Lager’s total units produced this year, how much were the prime costs?

Select one:

a. $451836

b. $688512

c. $718000

d. $537900

business   accounting   
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Answer #1

Actual manufacturing overhead cost S111,493 Budgeted manufacturing overhead costS138,421 Budgeted labor hours6,779 Hours Predetermined overhead rate - Budgeted manufacturing overhead cost /Budgeted labor hours - $138,421 /6,779 Hrs - S20.41908836 Per hour - $20.4191 Per hour (Rounded) Under applied overhead cost Actual overhead cost - Applied overhead cost S36,899S111,493 - Applied overhead cost Applied overhead cost S111,493 - S36,899 - $74,594 Applied overhead cost - Actual direct labor hours * Predetermined overhead rate $74,594- Actual direct labor hours * S20.4191 Per hour Actual direct labor hours- $74,594 S20.4191 Per hour - 3,653.148278 Hours Total direct labor cost- Actual direct labor hours * Actual labor cost per hour - 3,653.148278 Hours * S21 Per hour - $76,716.11383 - S76,716

2 Prime cost per unit Direct material cost per unit + Direct labor cost per unit - $11 Per unit$14 Per unit -S25 Per unit Actual units produced 21,51 6 Units - 21,516 Units $25 Per unit - S537,900

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