Kirkaid Company recorded the following transactions for the just completed month

Question

Kirkaid Company recorded the following transactions for the just completed month:

a. $118,000 in raw materials were requisitioned for use in production. Of this amount, $89,000 was for direct materials and the remainder was for indirect materials.

b. Total labor wages of $142,000 were incurred. Of this amount, $122,000 was for direct labor and the remainder was for indirect labor.

c. Additional actual manufacturing overhead costs of $214,000 were incurred. d. A total of $268,000 in manufacturing overhead was applied to jobs.

Required: Determine the underapplied or overapplied overhead for the month.

Explanation / Answer

Required: Determine the underapplied or overapplied overhead for the month.

Applied overhead = $268000

Actual overhead

Overapplied overhead = 263000-268000 = $5000

Indirect material (118000-89000) 29000 Indirect labour (142000-122000) 20000 Other actual manufacturing overhead 214000 Total Actual overhead 263000

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