Calculating Over-or Underapplied Overhead Costs
Refer to M2-10 for Kelly Company. Its actual manufacturing costs for the most recent period are summarized here:
Item | Description |
| Total Cost |
Direct materials | Used on Jobs 101 and 102 |
| $90,000 |
Indirect materials | Used on multiple jobs |
| 15,000 |
Hourly labor wages | 750 hours @ $25 per hour |
|
|
| 200 hours for Job 101 = | $5,000 |
|
| 300 hours for Job 102 = | 7,500 |
|
| 250 hours for Job 103 = | 6,250 | 18,750 |
Factory supervision |
|
| 4,250 |
Production engineer |
|
| 6,000 |
Factory janitorial work |
|
| 2,000 |
General and administrative salaries |
|
| 8,000 |
Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.) | 7,000 | ||
Other general and administrative costs (office rent, insurance, depreciation, etc.) | 5,000 |
1. Post the preceding information to Kelly Company’s Manufacturing Overhead T-account.
2. Compute over–or underapplied manufacturing overhead.
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