Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing

Question

  Actual direct-labor cost: 80,000 hours at $17.50 per hour

  Budgeted manufacturing overhead: $997,500

  Actual selling and administrative expenses: 431,000

  Actual manufacturing overhead:

  Indirect material:

References

Section BreakExercise 3-34 Overapplied or Underapplied Overhead (LO 4, 5)

1.

value:
0.83 points

Required information

Exercise 3-34 Part 1

References

WorksheetExercise 3-34 Part 1

2.

value:
0.83 points

Required information

Exercise 3-34 Part 2

The following information pertains to Trenton Glass Works for the year just ended.

Explanation / Answer

1. Budgeted Manufacturing Overheads = $997500

Budgeted Labour Hours = 70000 hours

Predetermined Overhead Rate = Budgeted Manufacturing Overheads / Budgeted Labour Hours

= 997500 / 70000

= $14.25 per Direct Labour Hour

2. Actual Direct Labour hours = 80000

Predetermined Overhead Rate = $14.25 per Direct labour hour

Overheads applied = 80000 x 14.25 = $1140000

Actual Overheads incurred = $1012000

Overapplied Overheads = 1140000 - 1012000 = $128000

Calculation of Actual Overheads incurred:

$ Indirect Material consumed:     Opening                                  47000     + Purchases                            93000     - Closing                                 -53000 87000 Depreciation 233000 Property taxes 21000 Indirect Labour 80000 Supervisory salaries 200000 Utilities 58000 Insurance 32000 Rental of space 301000 Total Actual Manufacturing Overheads incurred 1012000

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