Question

Suit Up produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses Suit Up reports the following cost data for the past year: (Click the icon to view the cost data) Read the requirements empts Enter the formula for predetermined manufacturing overhead rate, the compute the rate Estimated yearly overhead costs / Estimated yearly machine hours . Predetermined overhead rate 6400 = per machine hour Requirement 2. Calculate the allocated manufacturing overhead for the past year. Manufacturing overhead allocated

Answer 1

Ans: A). Budgeted Manufacturing overheads- Plant utilities+ indirect materials+ plant depreciation+ indirect labor MFR costs

= 5,900+49,000+71,000+40,500

= $166,400

Estimated yearly machine hours= 6,400

Pre determined machine hours= $166,400/6400

= $ 26 per machine hour

B). Manufacturing overhead allocated = Actual machine hours* predetermined machine hours

= 6,600* 26

= 171,600

C), Manufacturing overhead

Particulars	Amount($)	Particulars	Amount($)
Actual Indirect Materials	51,000	Manufacturing overhead allocated	171,600
Actual indirect manufacturing labor	41,500
Actual depreciation on plant and equipment	73,000
Actual plant utilities	7,400
Ending balance	1,300

Actual Manufacturing overhead incurred as per T-Account= $51,000+ $41,500+$73,000+$7400

= $ 172,900

Under applied Overhead= Actual manufacturing overhead- Applied Manufacturing overhead

= $172,900- 171,600

=$ 1,300

Date	Account title and explanation	Debit($)	Credit($)
	Cost of goods sold	$1,300
	Under-applied manufacturing overhead		$1,300
	(being under applied overhead to cost of goods sold)