For the current year, Your Company incurred $ 150,000 in actual manufacturing ov
ID: 2490860 • Letter: F
Question
For the current year, Your Company incurred $ 150,000 in actual manufacturing overhead cost. The manufacturing Overhead account showed that overhead was underapplied in the amount of $6,000 for the year. The Predetermined overhead rate was 130% of direct labour costs. How much was spent on labor for the year? (Round to nearest dollar if necessary ) Use the following information to determine if overhead is over/under for the period. Your Company uses a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The Company's management made the following estimates for the year: At the end of the year, the records of Clark Technology. Inc., revealed the following actual cost and operating data for all jobs worked on during the year: Company D applies Manufacturing Overhead at the rate of $10,00 per direct labor hour. During the year. Company D recorded direct labor cost of $460,000 for employees who worked 50,000 direct labor hours. Overhead was over applied by $25,000 for the year. What was the actual overhead cost for the year? A company should use process costing, rather than job order costing, if:Explanation / Answer
16. Actual direct labour overhead = 281000/130% = 216154
Thus answer will be B). 216154
17. Over head to be applied = 7.94x80300 = $637582
Overheads actually applied = $635000
Underapplied overheads = 637582-635000 = 2582
Thus answer will be (C) $2582 Underapplied.
18. Overheads to be applied = 10 x 50000 =500000
Actual over head = 25000 + 500000
= 525000
Answer will be A). $525000