Manufacturing Overhead - over/underapplied Creative Lighting, Inc., makes specialty table lamps. Manufacturing overhead...
Manufacturing Overhead - over/underapplied Creative Lighting, Inc., makes specialty table lamps. Manufacturing overhead is applied to production on a direct labor hours basis. During June, the first month of the company's fiscal year, $56,520 of manufacturing overhead application rate of $6 per direct labor hour.
Required:
A. Calculate the number of hours of direct labor used during June.
B. Actual manufacturing overhead costs incurred during June totaled $49,340. Calculate the amount of over or underapplied overhead for June.
C. Identify two possible explanations for the over or underapplied overhead
Homework Answers
A. No of Direct Labor hours = ( $ 56520 / $ 6 ) = 9420 Hours.
B. Actual manufacturing overhead cost is $ 49340 and budgeted is $ 56520.
Manufacturing overhead costs for the June is Over applied.
C. Over applied means Budgeted overhead is higher than Actual overhead.
Under applied means Budgeted overhead is Lower than Actual overhead.
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