The company records the following actual costs for the year: Indirect labor.....
ID: 2424523 • Letter: T
Question
The company records the following actual costs for the year:
Indirect labor.........................................$40,000 Rent on Plant..........................................$16,000
Plant supplies.........................................20,000 Plant utilities.............................................10,000
Machinery repair......................................14,000 Sales commissions....................................30,000
Advertising.............................................6,000 Direct labor.................................................64,000
Jay had budgeted $60,000 of direct labor cost and $90,000 of manufacturing overhead costs of the year.
Question: Compute the allocated manufacturing overhead.
Explanation / Answer
Solution.
Budgeted direct labor cost is = $60,000
Actual Direct labor = $64,000
Allocated manufacturing overhead is ....
Indirect labor.........................................$40,000
Rent on Plant........................................$16,000
Plant supplies.........................................20,000
Plant utilities.............................................10,000
Machinery repair......................................14,000
Total manufacturing overhead = $100,000
Budgeted manufacturing overhead costs = $90,000
Overapplyed manufacturing overhead = $10,000