Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing
ID: 2424002 • Letter: A
Question
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Actual selling and administrative expenses: 431,000
Actual manufacturing overhead:
Indirect material:
References
Section BreakExercise 3-34 Overapplied or Underapplied Overhead (LO 4, 5)
1.
value:
0.83 points
Required information
Exercise 3-34 Part 1
References
WorksheetExercise 3-34 Part 1
2.
value:
0.83 points
Required information
Exercise 3-34 Part 2
The following information pertains to Trenton Glass Works for the year just ended.Explanation / Answer
1. Budgeted Manufacturing Overheads = $997500
Budgeted Labour Hours = 70000 hours
Predetermined Overhead Rate = Budgeted Manufacturing Overheads / Budgeted Labour Hours
= 997500 / 70000
= $14.25 per Direct Labour Hour
2. Actual Direct Labour hours = 80000
Predetermined Overhead Rate = $14.25 per Direct labour hour
Overheads applied = 80000 x 14.25 = $1140000
Actual Overheads incurred = $1012000
Overapplied Overheads = 1140000 - 1012000 = $128000
Calculation of Actual Overheads incurred:
$ Indirect Material consumed: Opening 47000 + Purchases 93000 - Closing -53000 87000 Depreciation 233000 Property taxes 21000 Indirect Labour 80000 Supervisory salaries 200000 Utilities 58000 Insurance 32000 Rental of space 301000 Total Actual Manufacturing Overheads incurred 1012000