Problem 6 - Moss Company applies manufacturing overhead based on direct labor ho
ID: 2444420 • Letter: P
Question
Problem 6 - Moss Company applies manufacturing overhead based on direct labor hours. It provided the following information from its accounting records for 2015:
Expected production
28,000 labor hours
Actual production
29,000 labor hours
Budgeted overhead
$1,332,800
Actual overhead
$1,290,000
Jobs 102 & 103 are completed during the period. How much overhead will be applied to job 103 if its total labor cost was $4,640 and labor is $14.50 per hour?
Expected production
28,000 labor hours
Actual production
29,000 labor hours
Budgeted overhead
$1,332,800
Actual overhead
$1,290,000
Explanation / Answer
Predetermined Overhead Rate = Budgeted Overhead / Budgeted Hours
= 1332800/28000 i.e 47.60 per hour
Hours Worked on job 103 is = 4640/14.50 i.e 320 hours
Overhead applied on job 103 = 320*47.60 i.e 15232