Question

Hi there! I need help finding Overhead $ for parts b & c. Thanks in advance.

Sunland 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 72,500 direct labor hours totaled $580,000. (a) Assume that during the year, the company incurred manufacturing overhead totaling $579,000 for 72,500 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 e.g. -45 or parentheses e.g. (45).) Overapplied Overhead $ 1000 (b) Assume that during the year, the company incurred manufacturing overhead totaling $579,000 for 75,650 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 e.g. -45 or parentheses e.g. (45).) Overapplied Overhead $ (c) Assume that during the year, the company incurred manufacturing overhead totaling $606,000 for 75,650 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 e.g.-45 or parentheses e.g. (45).) Underapplied Overhead $

Answer 1

b) Overhead rate = 580000/72500 = 8

Applied overhead = 75650*8 = 605200

Actual overhead = 579000

Over applied overhead 26200

c) Overhead rate = 580000/72500 = 8

Applied overhead = 75650*8 = 605200

Actual overhead = 606000

Under applied overhead 800