Question

Help Save & Exit Submit Check my work 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 $195,000. Estimated direct labor cost was $469,950 for 19,500 hours. Actual costs for the most recent month are summarized here: Total Cost $46,996 Item Description Direct labor (1,950 hours) Indirect costs Indirect labor Indirect materials Factory rent Factory supervision Factory depreciation Factory janitorial work Factory Insurance General and administrative salaries Selling expenses 2,580 3,460 3,33e 4,720 5,740 1.130 1.720 4,270 5,370 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. ences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined Overhead Rate Per DL Hour Required Required 2 >

Answer 1

11. Calculate the predetermined overhead rate. Predetermined Overhead Rate $10.00 per DL hour 2. Calculate the amount of applied manufacturing overhead. Applied Manufacturing Overhead $19,500 3. Calculate actual manufacturing overhead costs. Actual Manufacturing Overhead Costs $22,680 4. Compute over- or underapplied overhead. Overhead $3,180 underapplied

Explanation: Required 1 Calculate the predetermined overhead rate. Predetermined overhead rate = Estimated manufacturing overhead cost / Estimated total direct labor-hours Predetermined overhead rate = $195,000 / 19,500 hours Predetermined overhead rate = $10.00 per DL hour Required 2 Calculate the amount of applied manufacturing overhead. Applied manufacturing overhead = Predetermined overhead rate * Actual direct labor-hours Applied manufacturing overhead = ($10.00 per DL hour * 1,950 hours) Applied manufacturing overhead = $19,500 Required 3 Calculate actual manufacturing overhead costs. Actual manufacturing overhead costs Indirect labor $2,580 Indirect materials 3,460 Factory rent 3,330 Factory supervision 4,720 Factory depreciation 5,740 Factory janitorial work 1,130 Factory insurance 1,720 Actual manufacturing overhead costs $22,680

Required 4 Compute over- or underapplied overhead. Under-applied (over-applied) overhead Actual manufacturing overhead costs Less: Manufacturing overhead applied Under-applied (over-applied) overhead $22,680 19,500 $3,180