(E4-4) kirkaid Company recorded the following transactions for the just complete

Question

   (E4-4) kirkaid Company recorded the following transactions for the just completed month:

a.     $ 84,000 in raw materials were requisitioned for used in production. Of this amount, $72,000 was for director materials and the remainder was for indirect cost.

b.     Total labor wages of $ 108,000 were incurred. Of this amount, $105,000 was for direct labor and the remainder was for indirect labor.

c.     Additional actual manufacturing overhead was applied to jobs.

Required:

Determine the underapplied or overapplied overhead for the month.

kirkaid Company recorded the following transactions for the just completed month: $ 84,000 in raw materials were requisitioned for used in production. Of this amount, $72,000 was for director materials and the remainder was for indirect cost. Total labor wages of $ 108,000 were incurred. Of this amount, $105,000 was for direct labor and the remainder was for indirect labor. Additional actual manufacturing overhead was applied to jobs. Required: Determine the underapplied or overapplied overhead for the month.

Explanation / Answer

actual manufactured cost = 197,000

total manufactured overhead = 218,000

over applied overhead = 218000-197000 = 210000

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