Question

Question 4 View Policies Current Attempt In Progress Sheridan Music Company makes custom marimbas and xylophones. Since much of the work on these musical Instruments is done by hand, the company uses direct labor hours as its manufacturing overhead application base. The company's annual budgeted overhead costs for 72,700 direct labor hours totaled $581,600 (a) Assume that during the year, the company incurred manufacturing overhead totaling $584,400 for 72.700 direct labor hours. By how much was manufacturing overhead under or overapplied for the year? (Enter negative amount using either a negative sin preceding the numbers-450 parentheses es. (450 • Overhead $ (b) Assume that during the year, the company incurred manufacturing overhead totaling $584,400 for 74,050 direct labor hours. By how much was manufacturing overhead under or overapplied for the year? (Enter negative amount using either a negative sign preceding the numbers. -45 or parentheses (451 Overhead $ (C) Assume that during the year, the company incurred manufacturing overhead totaling $594,000 for 74,050 direct labor hours. By how much was manufacturing overhead under-or overapplied for the year? (Enter negative amount using either a negative sign preceding the number es-45 or parentheses 68.(451) • Overhead $

Answer 1

a) Under applied overhead $ 2,800 Overhead application rate = = = Total Budgeted overhead / Budgeted Direct labour hours $581600 / 72700 $ 8.00 per DLH Total Overhead applied = Actual DLH'S * Overhead rate 72700 * $ 8 $ 581,600 Actual overhead Less: Applied Overhead Under applied overhead $ $ $ 584,400 581,600 2,800

b) Over applied overhead $ 8,000 Total Overhead applied = Actual DLH's * Overhead rate 74050 * $8 $ 592,400 Applied Overhead Less: Actual overhead Over applied overhead $ $ $ 592,400 584,400 8,000 c) Under applied overhead $ 1,600 Total Overhead applied = Actual DLH's * Overhead rate 74050 * $ 8 $ 592,400 Actual overhead Less: Applied Overhead Under applied overhead $ $ $ 594,000 592,400 1,600