Concord Manufacturing Company, a small manufacturer of appliance parts, has just completed its first year of...

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Question

Concord Manufacturing Company, a small manufacturer of appliance parts, has just completed its first year of operations. The

Based on Concord Manufacturing Companys actual operations over the past year, was manufacturing overhead underapplied or ove

business accounting

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Answer 1

Answer #1

Predetermined overhead rate

300

% of direct labor cost

Calculations:

Total budgeted labor hours = 10 employees x 1,800 hours = 18,000 hours

Total budgeted labor cost = $18,000 hours x $15 = $270,000

Predetermined overhead rate = (Budgeted overhead ÷ Budgeted labor cost) x 100

= ($810,000 x $270,000) x 100

= 3 x 100

= 300%

.

Overhead

Under applied

by

$10,000

Calculations:

Actual direct labor cost = Actual direct labor hours x Actual rate = 26,000 hours x $15 = $390,000

Overhead applied = $390,000 x 300% = $1,170,000


Actual factory overhead	$1,180,000
Overhead applied	$1,170,000
Under applied	$10,000

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Answer 2

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