Convert Departmental Data to Plantwide Data, Plantwide Overhead Rate, Apply Over
ID: 2457397 • Letter: C
Question
Convert Departmental Data to Plantwide Data, Plantwide Overhead Rate, Apply Overhead to Production At the beginning of the year, Hallett Company estimated the following: Assume that Hallett has decided to use a plantwide overhead rate based on direct labor hours. Actual data for the month of June are as follows: Calculate the predetermined plantwide overhead rate. Round your answer to the nearest cent Calculate the overhead applied to production for the month of June. Use an overhead application rate that is rounded to the nearest cent in your calculations, and round your final answer to the nearest dollar. Calculate the overhead variance for the month of June.Explanation / Answer
Answer for question no.1:
Predetermined plantwide overhead rate =Plantwide overhead/Total direct labour hours
=$598,000/131,200
=$4.56 per direct labour hour.
Answer for question no.2:
Actual direct labour hours =11,400 hours.
Overhead absorption rate=$4.56 per direct labour hour.
Overhead applied to production =11,400*$4.56
=$51,960.37
Answer for question no.3:
Overhead variance = Overhead applied - Actual overhead.
=$51,960.37 - $56,360.
=$4,399.63(U).
Particulars Cutting department sewing department Total Overhead $248,000.00 $350,000.00 $598,000.00 Direct labour hours 31200 100000 131200 Machine hours 150000 150000