The following information was drawn from the accounting records of Marlin Manufacturing Co. -----------------------Product 1 Product...
The following information was drawn from the accounting records of Marlin Manufacturing Co.
-----------------------Product 1 Product 2 Product 3
Direct Material Cost $25,000 $ 30,000 $35,000
Direct Labor Cost $30,000 $40,000 $50,000
Direct Labor Hours 1,200 hours 1,800 hours 2,000 hours
Factory overhead is estimated to be $30,000 and is applied on a basis of direct labor dollars. This overhead cost is not traceable to any particular product. Factory overhead allocated to Product 2 is...
Why is $4800 not correct, and what would that be the answer to in this particular question?
Homework Answers
| Working Notes: | ||||||
| CACLULATION OF OVERHEAD APPLICATION RATE PER LABOR HOURS | ||||||
| Overhead Application Rate = | Budgeted Overhead Cost | "/" | Total Direct Labor Hours | "=" | Estimated Overhead rate PER Labor Hrs | |
| Overhead Application Rate = | $ 30,000 | "/" | 5,000 | "=" | $ 6.00 | |
| (1200+1800+2000) | ||||||
| Solution: | ||||||
| CALCULATION OF TOTAL OVERHEAD ALLOCATED ON PRODUCT 2 | ||||||
| Applied Ovehead = | Labor Hours Used | "X" | Rate Per Hours | "=" | Overhead Cost Applied | |
| Applied Ovehead = | 1,800 | "X" | $ 6.00 | "=" | $ 10,800 | |
| Applied Ovehead = | "=" | $ 10,800 | ||||
| Answer = Allocated Overhead for Product 2 = $ 10,800 | ||||||
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The following information was drawn from the accounting records
of Marlin Manufacturing Co.
-----------------------Product 1 Product...
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